Acter Group Co., Ltd. (hereinafter referred to as "Acter*", stock code: 5536) has released its consolidated financial report for the third quarter of 2023 today (Nov 8th).
3Q23 Key Highlights

• In the third quarter of 2023, Acter* reported consolidated revenue of NT$6.46 billion, attributable net profit to the parent company of NT$0.51 billion, and earnings per share (EPS) of NT$4.11. Compared to the previous year, decreased by 22%, 20% and 26%, respectively. For the first three quarters of 2023, the consolidated revenue reached NT$18.44 billion, marking an 9% year-on-year decrease. The after-tax attributable net profit to the parent company was NT$1.49 billion, and the EPS reached NT$12.28, with year-on-year increases of 10% and 4%, respectively. Acter* has pointed out that, despite the revenue decline due to project completions and a high comparison base, the group remains focused on improving project efficiency and cost reduction. As a result, profitability continues to grow, showcasing excellent earnings capability.
• Acter* focuses on high-quality projects and cost control, achieving overall gross margin, operating profit margin, and after-tax net profit margin of 19%, 12%, and 10% in the third quarter, all surpassing the same period last year. For the first three quarters of 2023, the gross margin, operating profit margin, and after-tax net profit margin have also significantly improved compared to the same period in 2022, reaching 20%, 14%, and 11%.
• Acter* actively expands into the Southeast Asian market. In addition to further diversifying regional risks, this strategy allows the company to provide early assistance and support to clients during the initial evaluation phase, facilitating business expansion and rapidly increasing the share of business in the region.
• The Board of Directors has resolved to distribute a cash dividend of NT$ 4.5 per share for the first half of 2023 (calculated with a par value of NT$5 per share), an improvement compared to the previous year, and equivalent to 55% payout ratio. When calculated with a par value of NT$10 per share, it's equivalent to a cash dividend of NT$ 9 per share.
• Acter* has been experiencing an improved momentum of new order since 2H23 and will continues to diversify its business across multiple industries and regions to mitigate potential negative impacts. Coupled with more than NT$34 billion accumulated backlog, Acter* remains positive on the future outlook.

3Q23 Overview

• In the third quarter of 2023, Acter* reported consolidated revenue of NT$6.46 billion, attributable net profit to the parent company of NT$0.51 billion, and earnings per share (EPS) of NT$4.11 (calculated with a par value of NT$5 per share, equivalent to 8.22 per share with a par value of NT$10 per share). A 22.49% decrease in revenue compared to the previous year due to the completion of short-term projects and a high comparison base. Although the overall business environment remains challenging and uncertain, Acter* has shown a proactive stance by continuously addressing customer needs, maintaining existing relationships, and pursuing new customers and industries to sustain the company's stable growth in business and profitability.
• In the third quarter, overall gross margin, operating profit margin, and after-tax net profit margin have all significantly improved compared to the same period last year, reaching 19%, 12%, and 10%, respectively. Cost control has become a key strategy for Acter*, with the group regularly assessing its supply chain, seeking alternative suppliers or materials to find more cost-effective options. Collaborating with suppliers to optimize procurement processes, reduce procurement costs, and ensure material quality has been crucial in maintaining excellent profitability. Additionally, completing low-margin projects and securing high-margin orders have positively contributed to overall profitability.
• By geographical region, Southeast Asia, although having a relatively lower share, has been the fastest-growing region and a focal point for Acter*. Taiwan has shown stability, and revenue from mainland China has increased as projects gradually completed. By industry, semiconductor-related projects have contributed the most, while electronic assembly have also experienced significant growth.
• Acter* has decided to distribute cash dividends of NT$ 4.5 per share for the first half of 2023 (calculated with a par value of NT$5 per share), an improvement from the previous year, and equivalent to 55% payout ratio. When calculated with a par value of NT$10 per share, it's equivalent to NT$9 per share. Acter* has committed to continue driving profit growth and maintaining a high cash dividend distribution policy to share the overall operational success with all shareholders.

Outlook

• Due to global geopolitical changes, supply chain diversification risks, vast potential markets, and favorable policies, many companies are adopting a trend towards risk mitigation and actively expanding their presence in Southeast Asia. In 2022, Taiwanese businesses invested US$5.3 billion in Southeast Asian countries, surpassing the US$5.05 billion invested in mainland China. From January to August 2023, Taiwan's investments in the "New Southbound" region have already reached US$3 billion, making it the top destination for outward investments by Taiwanese companies. 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 robust systems and technologies. This approach provides Acter* with a significant advantage in developing the Southeast Asian market. In Taiwan, despite the slowdown in project growth due to a high base, Taiwan continues to play a crucial role as a manufacturing and research and development center for high-tech industries, including semiconductors, electronics, information technology, electronic components, and optoelectronics. Customers will continue to invest, presenting new project opportunities for Acter*. In the semiconductor industry, inventory adjustments are gradually coming to an end, and the International Semiconductor Industry Association (SEMI) predicts a market recovery in 2024. Combined with over NT$34 billion of accumulated backlog, the group is well-positioned to support its operations over the next 1-2 years.

Acter* 3Q23 consolidated financial summary

Unit: NTD in thousand

2023 Dividend Semi-Annual Payout Schedule (par value NT$5/share)

The company's par value per share is NT$5. If converted to 10 par value per share, the distribution is equivalent to NT$9 in cash dividends.

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