Depreciation and amortization expenses totaled NT$8.64 billion in 1Q09, compared to NT$9.15 billion in 4Q08. Depreciation within CoGS decreased by 9.2% to NT$6.97 billion. Following the adoption of ROC SFAS No. 10 in 1Q09, CoGS was higher than if the new rule had not been adopted. General and administration expenses increased to NT$529 million, mainly due to the increase in professional fees. Sales & marketing expenses dropped to NT$632 million in connection with the decrease in IP amortization. R&D expenses decreased to NT$1,821 million due to the expense control activities in 1Q09. As a result, total operating expenses decreased 2.9% to NT$2.98 billion. The total R&D expense was 16.8% of revenue in 1Q09.
Non-operating Income (Expenses)
(Amount: NT$ million) 1Q09 4Q08 1Q08
Net Non-operating Income (Exp.) (843) (19,081) 0
Net Interest Income 37 115 116
Net Investment Loss (1,079) (15,465) (224)
Gain on Disposal of Investment 0 52 652
Exchange Gain (Loss) 255 345 (718)
Others (56) (4,128) 174
Net non-operating losses during 1Q09 were NT$843 million. Net investment losses were NT$1.08 billion, including NT$599 million of investment losses accounted for under the equity method and a NT$523 million loss from valuation of ProMos shares. The exchange gain of NT$255 million was partially offset by the valuation loss of forward contract. Therefore, the net exchange gain was NT$78 million.
Cash Flow Summary
For the 3-Month For the 3-Month
(Amount: NT$ million) Period Ended Period Ended
Mar. 31, 2009 Dec. 31, 2008
Cash Flow from Operations 3,746 12,729
Net Income (Loss) (8,160) (23,510)
Depreciation & Amortization 8,640 9,154
Changes in working capital 3,051 4,601
Others 215 22,484
Cash Flow from Investing (1,696) (2,330)
Capital Expenditures (1,568) (1,471)
Others (128) (859)
Cash Flow from Financing (2,393) 508
Long term loan -- 700
Purchase of treasury stock (2,393) (191)
Others -- (1)
Effect of exchange rate 125 23
Net Cash Flow (218) 10,930
Net cash outflow was NT$218 million in 1Q09. Operating cash flow remained positive even when the utilization rate dropped to 30% in the first quarter. The investing cash outflow primarily reflects the CAPEX in 1Q09 of NT$1.57 billion. The NT$2.39 billion of financing cash outflow was from the purchase of treasury stock in the 13th share buy-back program. Free cash flow (Note 2) for 1Q09 was NT$2.18 billion. Over the next 12 months, UMC will not need to repay any term loans.
Note 2: Free cash flow = Operating cash flow - Capital expenditures
Current Assets
(Amount: NT$ billion) 1Q09 4Q08 1Q08
Cash & Cash Equivalents 35.91 36.12 29.63
Notes & Accounts Receivable 6.08 7.80 12.78
Days Sales Outstanding 58 54 50
Inventories 7.05 7.77 11.09
Avg. Inventory Turnover 45 55 51
Total Current Assets 51.50 54.61 60.06
Cash and cash equivalents decreased NT$0.2 billion to NT$35.91 billion.
The decrease in notes & accounts receivable and inventory primarily reflected
the downward trend of the business. Average inventory turnover decreased to
45 days at the end of 1Q09.
Liabilities
(Amount: NT$ billion) 1Q09 4Q08 1Q08
Total Current Liabilities 10.95 11.43 26.98
Accounts Payable 2.58 2.05 4.50
Short-term Credit / Bonds 0.00 0.07 10.96
Others 8.37 9.31 11.52
Long-term Liabilities 8.20 8.13 7.50
Total Liabilities 22.67 23.31 38.08
Debt to Equity 12 % 13 % 17 %
