Acter Group Co., Ltd. (hereinafter referred to as "Acter*", stock code: 5536) has released its consolidated financial report for the second quarter of 2023 today (Aug 10th).
2Q23 Key Highlights

• In 2Q23, Acter* achieved a consolidated revenue of NT$6.4 billion, with a net profit attributable to the parent company of NT$0.54 billion, resulting in an earnings per share (EPS) of NT$4.42. Compared to the previous year, although the revenue experienced a marginal decrease of 2%, the net profit and EPS witnessed growth of 47% and 38%, respectively. Cumulatively, for the first half of 2023, the consolidated revenue reached NT$11.97 billion, marking a growth of 1%. The net profit attributable to the parent company amounted to NT$0.99 billion, with an EPS of NT$8.17, representing a year-on-year increase of 37% and 30% respectively.
• The gross margin, operating profit margin, and after-tax net profit margin achieved 21%, 17%, and 12%, respectively, all surpassing the figures from the same period last year. In the first half of 2023, the gross margin, operating profit margin, and after-tax net profit margin also demonstrated significant improvements compared to the same period in 2022, reaching 21%, 15%, and 11%, respectively, showcasing the exceptional profitability of the group.
• Accumulated backlog exceeded NT$30 billion, which is sufficient to support the operation of the group in next 1-2 years.
• Looking ahead to the second half of 2023, despite macro uncertainties, Acter* expects order momentum to improve and will continue to mitigate negative impacts by maintaining a diversified business strategy across multiple industries, regions, and sectors.
• Acter* has been ranked in the top 5% of the 9th Taiwan Stock Exchange Corporate Governance Evaluation, marking the company's eighth consecutive year to receive this honor.

2Q23 Overview

• Acter* reported 2Q 2023 consolidated revenue of NT$6.4 billion, with a net profit attributable to the parent company of NT$0.54 billion, resulting in an earnings per share (EPS) of NT$4.42 (calculated based on a par value of NT$5 per share, which is equivalent to NT$8.84 when calculated based on a par value of NT$10 per share). Despite a slight decrease of 2% in revenue compared to the higher base of the previous year, prudent cost control and the gradual contribution from high-gross-margin projects led to a 47% growth in net profit. Facing the challenging operating environment, Acter* continues to enhance project engineering efficiency, monitor raw material procurement lead times, and implement modular production processes. This approach ensures the completion progress of various scale projects, including cleanroom and electromechanical engineering, for key customers across industries. Despite challenges in the constrained supply chain, Acter* maintains a steady growth performance, showcasing the group's excellent project management capabilities.
• In the second quarter, there was a significant improvement in the overall gross margin, operating profit margin, and net profit margin compared to the same period last year, reaching 21%, 17%, and 12%, respectively. In comparison to the previous year, the supply and pricing of raw materials posed greater challenges. The company regularly assessed its supply chain, sought alternative suppliers or materials, aiming to find better cost structure. Moreover, efficiency was enhanced through automation and digital technologies, elevating project management effectiveness, ensuring the execution of project budgets and schedules, and resulting in excellent profitability.
• By region, Taiwan accounted for the highest proportion of revenue in the second quarter, followed by mainland China. Despite a lower share, the Southeast Asia region exhibited the fastest growth. In terms of industries, semiconductor-related projects made the most significant contribution, with noticeable growth also observed in electronic assembly and the medical biotechnology sector.

2023 Outlook

• In mainland China, despite short-term semiconductor market fluctuations, the mid to long-term outlook remains optimistic. In addition to continuous investments in mature semiconductor manufacturing process, the third-generation semiconductors have broad application prospects in fields such as military, aerospace, communications, energy, and electric vehicles. Apart from China's significant investment of CNY 10 trillion in developing third-generation semiconductors, Taiwan will also launch its plan for third-generation semiconductors, with the goal of achieving localization by 2024. These investments will continue to generate new order opportunities for Acter*'s. Furthermore, the global supply chain restructuring, vast market opportunities, rapid economic growth, preferential policies, developing infrastructure, and technological innovation are attracting various industries to invest in Southeast Asia. Acter* has subsidiaries in all of these regions, engaging in localized operations and carrying on the legacy of Taiwan's experience, enabling the subsidiaries to rapidly establish comprehensive systems and technologies. This has provided advantages for Acter*'s in bidding new projects. In Taiwan, while project growth momentum may slow down due to a comparison high base, Taiwan remains a significant manufacturing and research and development center for crucial high-tech industries such as semiconductors, electronics, information technology, electronic components, and optoelectronics globally. Customers will continue to invest, presenting Acter* with new opportunities. Moreover, accumulated backlog has exceeded NT$30 billion, which is sufficient to support the group’s operation for 1-2 years.

Sustainable development

• Implementing corporate governance, deepening corporate culture, and advancing sustainable development have always been the guiding principles of Acter*. For eight consecutive years, the company has ranked within the top 5% in the Taiwan Stock Exchange's corporate governance assessment. In the ESG rating of 297 global Construction & Engineering companies by S&P, Acter* is in the top 4% (as of Bloomberg data up to May 31, 2023). Acter* envisions "Implementing ESG values and developing green businesses," focusing on its core business and industry innovation, aligning with the United Nations Sustainable Development Goals and the company's core strengths. The company promotes green and low-carbon engineering, establishes responsible supply chains, and drives ESG and carbon neutrality initiatives globally. As a promoter for green engineering, Acter* assists clients in achieving carbon neutrality and together strives towards a sustainable vision.

Acter* 2Q23 consolidated financial summary

Unit: NTD in thousand

News Contact:

ACTER GROUP CORPORATION LIMITED:

Assistant Vice President     Miss Tsao   (04)2261-5288  ir@acter.com.tw

IPR Advisors   Tim Chen   (02)2758-0339  ir@ipradvisors.com