SMIC Reports 2013 Third Quarter Results

All currency figures stated in this report are in US Dollars unless stated otherwise.

The Company started to prepare consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS") in 2012's Annual Report. All prior period information has been reclassified to conform to IFRS presentation.

22 Oct, 2013, 08:33 ET from Semiconductor Manufacturing International Corporation

SHANGHAI, Oct. 22, 2013 /PRNewswire/ -- Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) ("SMIC" or the "Company"), one of the leading semiconductor foundries in the world, today announced its consolidated results of operations for the three months ended September 30, 2013.

Third Quarter 2013 Highlights:

  • Revenue including wafer shipments from Wuhan Xinxin was $534.3 million in 3Q13, an increase of 15.8% year over year, and down 1.3% quarter over quarter.
  • Non-GAAP revenue excluding wafer shipments from Wuhan Xinxin was $503.7 million in 3Q13, an increase of 21.7% year over year, and up 0.4% quarter over quarter.
  • Revenues from China-based customers increased to 42.1% of overall revenue in 3Q13, an all-time high, compared to 35.3% in 3Q12 and 40.9% in 2Q13.
  • Gross margin including wafer shipments from Wuhan Xinxin was 21.0% in 3Q13, compared to 27.5% in 3Q12 and 25.0% in 2Q13.
  • Non-GAAP gross margin excluding wafer shipments from Wuhan Xinxin was 22.1% in 3Q13, compared to 30.4% in 3Q12 and 26.7% in 2Q13.
  • Profit attributable to SMIC was $42.5 million in 3Q13, compared to $12.0 million in 3Q12 and $75.4 million in 2Q13.

Fourth Quarter 2013 Guidance:

The following statements are forward looking statements which are based on current expectations and which involve risks and uncertainties, some of which are set forth under "Safe Harbor Statements" below.

  • Excluding wafer shipments from Wuhan Xinxin which SMIC began gradually phasing out in 3Q13, non-GAAP revenue is expected to be flat to down 4.5% quarter over quarter.
  • Revenue including wafer shipments from Wuhan Xinxin is expected to be down 4.5% to down 9% quarter over quarter.
  • Non-GAAP gross margin excluding wafer shipments from Wuhan Xinxin is expected to range from 19.0% to 22.0%.
  • Gross margin including wafer shipments from Wuhan Xinxin is expected to range from 18.5% to 21.5%.
  • Non-GAAP operating expenses excluding the effect of foreign exchange, employee bonus accrual, funding of R&D contracts from the government and gain from the disposal of living quarters are expected to range from $80.0 million to $84.0 million.

Dr. Tzu-Yin Chiu, SMIC's Chief Executive Officer and Executive Director, commented, "SMIC has achieved another good quarter. Revenue excluding Wuhan wafer shipment was $503.7 million in the third quarter of 2013, representing a robust year over year growth of 21.7% and a sequential growth of 0.4%. Total revenue including Wuhan wafer shipments declined 1.3% sequentially as we exit our relationship with Wuhan Xinxin. I'm also pleased that we made $42.5 million in profit attributable to SMIC, which is our sixth consecutive quarter of positive profit.   I am happy to announce that 40nm wafer revenue grew 50.3% sequentially to 15.7% of total wafer revenue. This growth was mainly driven by smartphone related products. Meanwhile, 40nm new tape outs grew significantly in the second half of this year, driven by both consumer and communications products like smartphones, set-top box, IPTV, and tablets. As a result, we are targeting strong growth for 40nm next year.   During the quarter, demand for our differentiated applications continued to be strong, especially in the areas of power management, CIS, and EEPROM. Revenue from our differentiated applications, specifically PMIC, CIS, and EEPROM, grew over 50% year over year in 3Q2013 compared to 3Q2012.   We target another full year of record high revenue in 2013 with sustainable profitability and growth as our priority. Looking into 2014, we aim to outgrow the industry average again. We have a number of exciting opportunities ahead of us. 1) Our 40nm ramp up will continue. 2) Our 28nm technology is coming on line. 3) Our embedded Non-Volatile Memory (e-NVM) is finding wide spread customer acceptance. 4) A number of other differentiated technologies will be rolling out in 2014. And lastly, our new capacity for high-end and mature technology is coming on line. It will be an exciting 2014."

Conference Call / Webcast Announcement

Date: October 23, 2013

Time: 8:30 a.m. Shanghai time

Dial-in numbers and pass code:

China

400-620-8038 

(Pass code: SMIC)

Hong Kong 

852-2475-0994 

(Pass code: SMIC)

Taiwan 

886-2-2650-7825 

(Pass code: SMIC)

United States, New York

1-845-675-0437

(Pass code: SMIC)

The call will be webcast live with audio at http://www.smics.com/eng/investors/ir_presentations.php or http://www.media-server.com/m/p/k3yzasi5.

An archived version of the webcast, along with an electronic copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.

About SMIC

Semiconductor Manufacturing International Corporation ("SMIC"; NYSE: SMI; SEHK: 981) is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in mainland China, providing integrated circuit (IC) foundry and technology services at 0.35-micron to 40-nanometer. Headquartered in Shanghai, China, SMIC has a 300mm wafer fabrication facility (fab) and a 200mm mega-fab in Shanghai, a 300mm mega-fab in Beijing, a 200mm fab in Tianjin, and a 200mm fab project under development in Shenzhen. SMIC also has customer service and marketing offices in the U.S., Europe, Japan, and Taiwan, and a representative office in Hong Kong.

For more information, please visit www.smics.com.

Safe Harbor Statements

(Under the Private Securities Litigation Reform Act of 1995)

This press release contains, in addition to historical information, "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including statements under "Fourth Quarter 2013 Guidance" and in the last paragraph of the quote of SMIC's Chief Executive Officer, as well as the statements regarding future 2013 capital expenditures are based on SMIC's current assumptions, expectations and projections about future events. SMIC uses words like "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, risks associated with the global economic slowdown, orders or judgments from pending litigation and financial stability in end markets.

Investors should consider the information contained in SMIC's filings with the U.S. Securities and Exchange Commission (SEC), including its annual report on 20-F filed with the SEC on April 15, 2013, especially the consolidated financial statements, and such other documents that SMIC may file with the SEC or The Hong Kong Stock Exchange Limited ("SEHK") from time to time, including current reports on Form 6-K. Other unknown or unpredictable factors also could have material adverse effects on SMIC's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Except as may be required by law, SMIC undertakes no obligation and does not intend to update any forward-looking statement, whether as a result of new information, future events or otherwise.

About Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures

To supplement SMIC's consolidated financial results presented in accordance with IFRS, SMIC uses in this press release measures of operating results that are adjusted to exclude wafer shipments from Wuhan Xinxin Semiconductor Manufacturing Corporation ("Wuhan Xinxin"), which SMIC began gradually phasing out in 3Q13. This earnings release includes non-GAAP revenue, non-GAAP cost of sales and non-GAAP gross margin. It also includes fourth quarter 2013 guidance for non-GAAP revenues and non-GAAP gross margin, which exclude such shipments, and for non-GAAP operating expenses, which is adjusted to exclude the effect of foreign exchange, employee bonus accrual, funding of R&D contracts from the government and gain from the disposal of living quarters. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS.

SMIC believes that use of these non-GAAP financial measures facilitates investors' and management's comparisons to SMIC's historical performance. The Company's management regularly uses these non-GAAP financial measures to understand, manage and evaluate the Company's business and make financial and operational decisions.

The accompanying table has more information and reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.

Contact:

Investor Relations

+86-21-3861-0000 ext. 12804

ir@smics.com

 

Summary of Third Quarter 2013 Operating Results

Amounts in US$ thousands, except for EPS and operating data

3Q13

2Q13

QoQ

3Q12

YoY

Revenue

534,256

541,302

-1.3%

461,168

15.8%

Cost of sales

(422,274)

(406,075)

4.0%

(334,347)

26.3%

Gross profit

111,982

135,227

-17.2%

126,821

-11.7%

Operating expenses

(63,447)

(56,095)

13.1%

(106,455)

-40.4%

Profit from operations

48,535

79,132

-38.7%

20,366

138.3%

Other expense, net

(4,681)

(3,292)

42.2%

(7,335)

-36.2%

Profit before tax

43,854

75,840

-42.2%

13,031

236.5%

Income tax expenses

(914)

(510)

79.2%

(1,112)

-17.8%

Profit for the period

42,940

75,330

-43.0%

11,919

260.3%

Other comprehensive income:

Exchange differences on

   translating foreign operations

77

278

-72.3%

258

-70.2%

Total comprehensive income 

   for the period

43,017

75,608

-43.1%

12,177

253.3%

Profit attributable to SMIC

42,491

75,401

-43.6%

11,966

255.1%

Gross margin

21.0%

25.0%

-

27.5%

-

Earnings per ordinary share (basic and diluted)(1)

0.00

0.00

-

0.00

-

Earnings per ADS (basic and

diluted)

0.07

0.12

-

0.02

-

Wafers shipped (in 8"

equivalent wafers)

653,090

687,651

-5.0%

605,543

7.9%

Capacity utilization(2)

88.2%

98.5%

-

92.0%

-

Note:

(1) Based on weighted average ordinary shares of 32,084 million (basic) and 32,355 million (diluted) in 3Q13, 32,051 million (basic) and 32,312 million (diluted) in 2Q13, and 31,983 million (basic) and 31,993 million (diluted) in 3Q12.

(2) Based on total equivalent wafers out divided by estimated total quarterly capacity.

  • Revenue decreased to $534.3 million in 3Q13, down 1.3% QoQ from $541.3 million in 2Q13, mainly due to a decrease of revenue generated by shipments from Wuhan Xinxin. The Company began phasing out wafer shipments from Wuhan Xinxin in 3Q13.
  • Non-GAAP revenue excluding wafer shipments from Wuhan Xinxin was $503.7 million in 3Q13, compared to $501.8 million in 2Q13.
  • Cost of sales increased to $422.3 million in 3Q13, up 4.0% QoQ from $406.1 million in 2Q13.
  • Gross profit was $112.0 million in 3Q13, a decrease of 17.2% QoQ from $135.2 million in 2Q13.
  • Gross margin was 21.0% in 3Q13, down from 25.0% in 2Q13 primarily due to lower fab utilization in 3Q13 and product mix change.
  • Non-GAAP gross margin excluding wafer shipments from Wuhan Xinxin was 22.1% in 3Q13, down from 26.7% in 2Q13.
  • Operating expenses increased to $63.4 million in 3Q13, an increase of 13.1% QoQ from $56.1 million in 2Q13, mainly due to the reasons stated in Operating Expenses (Income) Analysis below.

 

Analysis of Revenue

Revenue Analysis

By Application

3Q13

2Q13

3Q12

Computer

1.8%

1.5%

1.5%

Communications

44.4%

45.6%

46.7%

Consumer

43.9%

45.3%

43.1%

Others

9.9%

7.6%

8.7%

By Service Type

3Q13

2Q13

3Q12

Wafers

93.8%

96.2%

94.9%

Mask making, testing, others

6.2%

3.8%

5.1%

By Customer Type

3Q13

2Q13

3Q12

Fabless semiconductor companies

87.7%

87.7%

86.8%

Integrated device manufacturers (IDM)

5.5%

7.0%

8.8%

System companies and others

6.8%

5.3%

4.4%

By Geography

3Q13

2Q13

3Q12

North America

46.0%

48.3%

55.2%

China(1)

42.1%

40.9%

35.3%

Eurasia(2)

11.9%

10.8%

9.5%

Wafer Revenue Analysis

By Technology (logic, memory only)

3Q13

2Q13

3Q12

40/45 nm

15.7%

10.0%

0.8%

55/65 nm

27.1%

30.9%

34.8%

90 nm

4.7%

4.6%

9.4%

0.13 micrometers

10.1%

10.5%

11.8%

0.15/0.18 micrometers

38.4%

40.1%

37.5%

0.25/0.35 micrometers

4.0%

3.9%

5.7%

Note:

(1) Including Hong Kong, but excluding Taiwan

(2) Excluding China

 

Capacity*

Fab / (Wafer Size)

3Q13

2Q13

Shanghai Mega Fab (8")

90,000

90,000

Shanghai 12-inch Fab (12")

24,750

18,000

Beijing Mega Fab (12")

81,000

81,000

Tianjin Fab (8")

36,000

34,500

Total monthly wafer fabrication capacity

231,750

223,500

Note:

* Wafers per month at the end of the period in 8" equivalent wafers, calculated on a 30-day basis for comparison purposes

  • Monthly capacity increased to 231,750 8-inch equivalent wafers in 3Q13 from 223,500 8-inch equivalent wafers in 2Q13, primarily due to the expansion of capacity in our Shanghai 12-inch fab.

 

Shipment and Utilization

8" equivalent wafers

3Q13

2Q13

QoQ

3Q12

YoY

Wafer shipments

653,090

687,651

-5.0%

605,543

7.9%

Utilization rate(1)

88.2%

98.5%

-

92.0%

-

Note:

(1) Based on total equivalent wafers out divided by estimated total quarterly capacity.

 

Detailed Financial Analysis

Gross Profit Analysis

Amounts in US$ thousands

3Q13

2Q13

QoQ

3Q12

YoY

Cost of sales

422,274

406,075

4.0%

334,347

26.3%

Depreciation

126,433

107,759

17.3%

93,258

35.6%

Other manufacturing costs

294,374

295,840

-0.5%

240,620

22.3%

Share-based compensation

1,467

2,476

-40.8%

469

212.8%

Gross profit

111,982

135,227

-17.2%

126,821

-11.7%

Gross margin

21.0%

25.0%

-

27.5%

-

  • Cost of sales was $422.3 million in 3Q13, up 4.0% QoQ from $406.1 million in 2Q13.
  • Depreciation within the cost of sales increased to $126.4 million in 3Q13, compared to $107.8 million in 2Q13.
  • Other manufacturing costs within the cost of sales decreased to $294.4 million in 3Q13, compared to $295.8 million in 2Q13.
  • Gross profit was $112.0 million in 3Q13, a decrease of 17.2% QoQ from $135.2 million in 2Q13.
  • Gross margin was 21.0% in 3Q13, down from 25.0% in 2Q13 primarily due to lower fab utilization in 3Q13 and product mix change.

 

Operating Expenses (Income) Analysis

Amounts in US$ thousands

3Q13

2Q13

QoQ

3Q12

YoY

Operating expenses

63,447

56,095

13.1%

106,455

-40.4%

Research and development

37,564

36,736

2.3%

72,945

-48.5%

General and administrative

24,718

42,636

-42.0%

24,859

-0.6%

Selling and marketing

9,324

9,775

-4.6%

8,178

14.0%

Other operating expense (income)

(8,159)

(33,052)

-75.3%

473

-

  • R&D expenses increased to $37.6 million in 3Q13, compared to $36.7 million in 2Q13. The increase was primarily due to an $6.8 million increase in R&D expenses associated with higher R&D activities from quarter to quarter, partially offset by a $6.0 million increase in funding of R&D contracts from the government, which was $9.0 million in 3Q13, compared to $3.0 million in 2Q13.
  • General and administrative expenses decreased to $24.7 million in 3Q13, down 42.0% QoQ from $42.6 million in 2Q13, mainly due to a decrease of employee bonus accrual in 3Q13.
  • Other operating income was $8.2 million in 3Q13, compared to $33.1 million in 2Q13, and consisted mainly of the gain arising from the disposal of part of the Company-owned living quarters in Shanghai. This 75.3% decrease from 2Q13 was mainly due to a one-time gain recorded in 2Q13 arising from the disposal of the Company's total ownership interest in SMIC (Wuhan) Development Corporation.

 

Other Income (expense), Net

Amounts in US$ thousands

3Q13

2Q13

QoQ

3Q12

YoY

Other income (expense), net

(4,681)

(3,292)

42.2%

(7,335)

-36.2%

Interest income

1,394

936

48.9%

1,088

28.1%

Finance costs

(8,673)

(9,080)

-4.5%

(11,150)

-22.2%

Foreign exchange gains or losses

2,404

2,949

-18.5%

1,405

71.1%

Other gains or losses

(357)

1,126

-

537

-

Share of profits of associates

551

777

-29.1%

785

-29.8%

  • The change of other gains or losses was mainly due to a decrease of revenue from our schools as a result of summer vacation.

 

Depreciation and Amortization

Amounts in US$ thousands

3Q13

2Q13

QoQ

3Q12

YoY

Depreciation and amortization

136,725

135,712

0.7%

143,219

-4.5%

 

Liquidity

Amounts in US$ thousands

3Q13

2Q13

Cash and bank balances

473,507

262,955

Restricted cash

195,813

214,430

Other financial assets

2,574

2,881

Trade and other receivables

396,108

472,426

Prepaid operating expenses

48,383

57,231

Inventories

289,954

308,328

Assets classified as held-for-sale

210

922

Total current assets

1,406,549

1,319,173

Current tax liabilities

85

143

Other financial liabilities

10

107

Promissory notes

14,895

14,791

Accrued liabilities

105,497

104,678

Deferred government grant

17,833

26,924

Borrowings

548,385

586,425

Trade and other payables

402,827

537,003

Total current liabilities

1,089,532

1,270,071

Cash Ratio

0.4x

0.2x

Quick Ratio

1.0x

0.8x

Current Ratio

1.3x

1.0x

 

Capital Structure

Amounts in US$ thousands

3Q13

2Q13

Cash and bank balances

473,507

262,955

Restricted cash

195,813

214,430

Current portion of promissory notes

14,895

14,791

Short-term borrowings

548,385

586,425

Long-term borrowings

553,435

474,692

Total debt

1,101,820

1,061,117

Equity

2,559,381

2,403,738

Total debt to equity ratio(1)

43.1%

44.1%

Note:

(1) Total debt divided by equity, total debt including short-term and long-term borrowings.

Cash and bank balances increased to $473.5 million in 3Q13, up 80.1% QoQ from $263.0 million in

2Q13 primarily because 1) of the receipt of $108.0 million in cash as partial capital contribution for the

joint venture company established in Beijing from the other shareholders of the joint venture and

2) the Company drew down some of the bank borrowings during 3Q13.

 

Cash Flow

Amounts in US$ thousands

3Q13

2Q13

Net cash from operating activities

269,581

108,360

Net cash used in investing activities

(213,133)

(242,559)

Net cash from financing activities

154,045

104,167

Effect of exchange rate changes

59

55

Net change in cash

210,552

(29,977)

 

Capex Summary

  • Capital expenditures for 3Q13 were $169.3 million.
  • The planned 2013 capital expenditure for our foundry operation is $675 million.
  • The 2013 planned capital expenditure does not account for additional expenditures for the joint venture company in Beijing, which was established in July 2013. The joint venture company will principally engage in, among other things, the testing, development, design, manufacturing, packaging and sale of integrated circuits.
  • In addition, we have budgeted capital expenditures of another $130 million in 2013 for the construction of living quarters for employees as part of the Company's employee retention program. We plan to either rent out or sell these living quarter units to employees in the future.

 

Recent Highlights and Announcements

  • SMIC IP R&D Center Applies EDA Solution of Beijing Empyrean (2013-10-04)

  • SMIC Introduces Its Diversifying Embedded Non-Volatile Memory Platform (2013-09-23)

  • SMIC Selected as Constituent of Hang Seng Corporate Sustainability Index Series for Third Consecutive Year  (2013-09-11)

  • Grant of Options (2013-09-09)

  • ŸSMIC Adopts Cadence Digital Flow with Advanced Features for Improving Area, Power and Performance (2013-09-04)

  • SMIC's 2013 Technology Symposiums Kicks Off in Shanghai (2013-09-04)

  • Circulars - Letter and Reply Form to New Registered Shareholder - Election of Means of Receipt and Language of Corporate Communication (2013-09-03)

  • Circulars - Notification Letter and Request Form to Non-registered Holders (2013-09-03)

  • Circulars - Notification Letter and Change Request Form to Registered Holders (2013-09-03)

  • Announcement of Unaudited Interim Results for the Six Months Ended June 30, 2013 (2013-08-26)

  • Notification of Board Meeting (2013-08-14)

  • List of Directors and Their Roles and Functions (2013-08-08)

  • Appointment of Independent Non-executive Director (2013-08-08)

  • SMIC Reports Unaudited Results for the Three Months Ended June 30, 2013 (2013-08-08)

    • Notification of Board Meeting (2013-07-19)

    Please visit SMIC's website at http://www.smics.com/eng/press/press_releases.php and http://www.smics.com/eng/investors/ir_filings.php for further details regarding the recent announcements.

     

    Semiconductor Manufacturing International Corporation

    CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND COMPREHENSIVE INCOME

    (In US$ thousands except share data)

    For the three months ended

    September 30, 2013

    June 30, 2013

    (Unaudited)

    (Unaudited)

    Revenue

    534,256

    541,302

    Cost of sales

    (422,274)

    (406,075)

    Gross profit

    111,982

    135,227

    Research and development

    (37,564)

    (36,736)

    General and administration expenses

    (24,718)

    (42,636)

    Sales and marketing expenses

    (9,324)

    (9,775)

    Other operating income

    8,159

    33,052

    Profit from operation

    48,535

    79,132

    Other expense, net

    (4,681)

    (3,292)

    Profit before tax

    43,854

    75,840

    Income tax expense

    (914)

    (510)

    Profit for the period

    42,940

    75,330

    Other comprehensive income

    Item that may be reclassified subsequently to profit or loss

    Exchange differences on translating foreign operations

    77

    278

    Total comprehensive income for the period

    43,017

    75,608

    Profit for the period attributable to:

    Owners of the Company

    42,491

    75,401

    Non-controlling interests

    449

    (71)

    42,940

    75,330

    Total comprehensive income for the period attributable to:

    Owners of the Company

    42,568

    75,679

    Non-controlling interests

    449

    (71)

    43,017

    75,608

    Earnings per share attributable to Semiconductor Manufacturing        International Corporation ordinary shareholders, basic and diluted

    0.00

    0.00

    Earnings per ADS attributable to Semiconductor Manufacturing        International Corporation ordinary ADS holders, basic and diluted

    0.07

    0.12

    Shares used in calculating basic earnings per share

    32,083,651,959

    32,051,257,487

    Shares used in calculating diluted earnings per share

    32,354,552,218

    32,311,620,628

    Reconciliations of Non-GAAP Financial Measures to Comparable

    GAAP Measures(1)

    Non-GAAP revenue

    503,669

    501,844

    Non-GAAP cost of sales

    (392,407)

    (367,610)

    Non-GAAP gross margin

    22.1%

    26.7%

    Note:

    (1) SMIC defines non-GAAP revenue, non-GAAP cost of sales and non-GAAP gross margin, which are non-GAAP financial measures, as revenue, cost of sales and gross margin, in each case excluding wafer shipments from Wuhan Xinxin. SMIC reviews non-GAAP financial measures together with revenue, cost of sales and gross margin to understand, manage and evaluate its business and make financial and operational decisions. The Company also believe it is useful supplemental information for investors and analysts to assess its operating performance without the effect of wafer shipments from Wuhan Xinxin, which were not output through its production capacity. SMIC announced in March 2013 that it had ceased to manage and operate the 300mm wafer fab in Wuhan owned by Wuhan Xinxin, and began gradually phasing out wafer shipments from Wuhan Xinxin in 3Q13. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they does not include all items that impact our net profit for the period. In addition, because non-GAAP financial measures are not calculated in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to revenue, cost of sales and gross margin prepared in accordance with IFRS.

    The following table sets forth the reconciliation of each of non-GAAP revenue, non-GAAP cost of sales and non-GAAP gross margin to its most directly comparable financial measure presented in accordance with IFRS, for the periods indicated.

    Semiconductor Manufacturing International Corporation

    CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND COMPREHENSIVE INCOME

    (In US$ thousands)

    For the three months ended

    September 30, 2013

    June 30, 2013

    September 30, 2012

    (Unaudited)

    (Unaudited)

    (Unaudited)

    Revenue

    534,256

    541,302

    461,168

    Revenue from Wuhan Xinxin

    (30,587)

    (39,458)

    (47,391)

    Non-GAAP revenue

    503,669

    501,844

    413,777

    Cost of sales

    (422,274)

    (406,075)

    (334,347)

    Cost of sales of Wuhan Xinxin

    29,867

    38,465

    46,204

    Non-GAAP cost of sales

    (392,407)

    (367,610)

    (288,143)

    Gross margin

    21.0%

    25.0%

    27.5%

    Non-GAAP gross margin

    22.1%

    26.7%

    30.4%

     

    Semiconductor Manufacturing International Corporation

    CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

    (In US$ thousands)

    As of

    September 30, 2013

    June 30, 2013

    (Unaudited)

    (Unaudited)

    ASSETS

    Non-current assets

    Property, plant and equipment

    2,558,563

    2,523,893

    Prepaid land use right

    123,974

    124,818

    Intangible assets

    227,380

    228,898

    Investments in associates

    23,758

    23,189

    Deferred tax assets

    43,889

    43,802

    Other assets

    36,969

    37,926

    Total non-current assets

    3,014,533

    2,982,526

    Current assets

    Inventories

    289,954

    308,328

    Prepaid operating expenses

    48,383

    57,231

    Trade and other receivables

    396,108

    472,426

    Other financial assets

    2,574

    2,881

    Restricted cash

    195,813

    214,430

    Cash and bank balances

    473,507

    262,955

    1,406,339

    1,318,251

    Assets classified as held-for-sale

    210

    922

    Total current assets

    1,406,549

    1,319,173

    TOTAL ASSETS

    4,421,082

    4,301,699

    EQUITY AND LIABILITIES

    Capital and reserves

    Ordinary shares, $0.0004 par value, 50,000,000,000 shares

    authorized, 32,088,989,727 and 32,075,631,400 shares issued and          outstanding at September 30, 2013 and June 30, 2013, respectively

    12,836

    12,830

    Share premium

    4,088,854

    4,088,071

    Reserves

    56,993

    53,079

    Accumulated deficit

    (1,708,540)

    (1,751,031)

    Equity attributable to owners of the Company

    2,450,143

    2,402,949

    Non-controlling interests

    109,238

    789

    Total equity

    2,559,381

    2,403,738

    Non-current liabilities

    Borrowings

    553,435

    474,692

    Deferred tax liabilities

    207

    257

    Deferred government grant

    213,098

    147,952

    Long-term financial liabilities

    5,429

    4,989

    Total non-current liabilities

    772,169

    627,890

    Current liabilities

    Trade and other payables

    402,827

    537,003

    Borrowings

    548,385

    586,425

    Deferred government grant(1)

    17,833

    26,924

    Accrued liabilities

    105,497

    104,678

    Promissory notes

    14,895

    14,791

    Other financial liabilities

    10

    107

    Current tax liabilities

    85

    143

    Total current liabilities

    1,089,532

    1,270,071

    Total liabilities

    1,861,701

    1,897,961

    TOTAL EQUITY AND LIABILITIES

    4,421,082

    4,301,699

    Note:

    (1) The Company made a reclassification of part of non-current deferred government grant to current liability as of June 30, 2013.

     

    Semiconductor Manufacturing International Corporation

    CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

    (In $US thousands)

    For the three months ended

    September 30, 2013

    June 30, 2013

    (Unaudited)

    (Unaudited)

    Cash flow from operating activities

    Profit for the period

    42,940

    75,330

    Depreciation and amortization

    136,725

    135,712

    Share of profits of associates

    (551)

    (777)

    Changes in working capital and others

    90,467

    (101,905)

    Net cash from operating activities

    269,581

    108,360

    Cash flow from investing activities:

    Payments for property, plant and equipment

    (255,561)

    (188,008)

    Payments for intangible assets

    (9,414)

    (14,914)

    Payments for land use right

    -

    (61,391)

    Proceeds from disposal of property, plant and equipment and intangible

    assets

    15,140

    7,553

    Changes in restricted cash relating to investing activities

    7,305

    (12,721)

    Payments to acquire financial assets

    (5,225)

    (2,852)

    Proceeds on sale of financial assets

    5,518

    1,215

    Proceeds from disposal of subsidiary

    29,104

    28,639

    Others

    -

    (80)

    Net cash used in investing activities

    (213,133)

    (242,559)

    Cash flow from financing activities:

    Proceeds from borrowings

    434,170

    306,939

    Repayment of borrowings

    (388,671)

    (189,323)

    Repayment of promissory notes

    -

    (15,000)

    Proceeds from exercise of employee stock options

    546

    1,551

    Proceeds from non-controlling interests

    108,000

    -

    Net cash from financing activities

    154,045

    104,167

    Effects of exchange rate changes on the balance of cash held in foreign

    currencies

    59

    55

    Net increase (decrease) in cash and bank balances

    210,552

    (29,977)

    Cash and bank balances, beginning of period

    262,955

    292,932

    Cash and bank balances, end of period

    473,507

    262,955

     

    SOURCE Semiconductor Manufacturing International Corporation



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