TPK REPORTS UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE FOURTH QUARTER OF 2023

Taipei, Taiwan, Mar 5 2024 – TPK Holding Co., Ltd. (TWSE: 3673) (“TPK” or the “Company”) today announced 2023 4th quarter unaudited consolidated operating results. Company reported revenues of NT$18,255 million and net profit of NT$3 million for the quarter. For the full year of 2023, revenues reached NT$69,861 million and EPS amounted to NT$0.51.

4Q23 Operating Results

Demand for global PC remained moderate in 4Q23, leading to a muted top-line growth for the Company. TPK reported 4Q23 revenues of NT$18,255 million, up 1.1% quarter-on-quarter and down 16.3% year-on-year. Gross profit amounted to NT$864 million, up 15.7% from the previous year and down 17.2% sequentially. Gross margin lowered from 5.8% to 4.7%, mainly due to changes in product and customer mix. Demand for tablet products (7”~11”) remained robust and recorded a revenues growth of 11.9% quarter-on-quarter. On the contrary, revenues from notebook PC (11”~16”) registered a sequential decline of 4.5%. In addition, smartphone segment (<7”) continued to undergo product transition, posting 34.7% sequential decline and accounted for only 12% of 4Q23 revenues.
For COGS breakdown, raw materials were NT$15,048 million, representing 82.4% of revenues, slightly higher from 81.9% from 3Q23 on the back of unfavorable product mix. Labor expense increased slightly to NT$1,195 million, equivalent to 6.5% of revenues, up from 6.1% earlier. Depreciation cost continued to trend lower to N$762 million, down from 4.7% to 4.2% of revenues.
For the fourth quarter, Company recorded net interest income of NT$124 million and foreign exchange loss of NT$12 million. Strategic investments totaled a loss of NT$174 million mainly due to market volatility and write-off. Other non-operating income was NT$36 million, including government subsidies and rental income. For 4Q23, net profit amounted to NT$3 million.

2023 Full Year Operating Results

In the backdrop of persistent weak global PC demand for 2023 and smartphone product transition, TPK reported unaudited consolidated revenues of NT$69,861 million for the year, down 28.1% year-on-year. In terms of product mix, revenues from tablet (7” to 11”) and notebook PC (11” to 16”) segments declined 29.9% and 40.4%, respectively form the year earlier as PC sales sagged. Smartphone product (<7”) posted 28.6% year-on-year decline as a major product toward end of its product lifecycle. Large form factor (>16”), including automotive, registered a sequential growth of 16.6%. Total shipments were 60 million, down 32.6% compared to 2022.
Gross profits recorded at NT$3,230 million, down 21.5% from the previous year, as a result of reduced business scale. Gross margin, on the other hand, improved slightly from 4.2% for the previous year to 4.6%. Operating profits amounted to NT$5 million above breakeven. Amid global inflation, monetary policy tightening and challenging transition for new businesses, Company posted non-operating profits of NT$588 million for 2023. Net profits totaled to NT$208 million for the year, equivalent to EPS of NT$0.51.

Balance Sheet & Cash Flow

As of December 31 2023, cash and cash equivalent1 were NT$46,321 million, down from NT$50,608 million at the end of third quarter. Total bank borrowings reduced in conjunction with decline in cash equivalent from NT$34,453 million to NT$29,778 million. Capital expenditure for the fourth quarter was NT$298 million on accrual basis. EBITDA remained healthy at NT$1,271 million for the quarter. For the full year of 2023, EBITDA reached NT$5,964 million. TPK remained at net cash of NT$16,543 million as of December 31 2023.

Note: All financial numbers are prepared in accordance with IFRs, which is approved by regulators in Taiwan.Note 1: Cash and cash equivalent includes “Cash Equivalents” and “Risk-Free Banking Financial Product.”

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