Depreciation within CoGS increased by 27.1% to NT$8.86 billion due to higher shipments in 2Q09. Other mfg. costs increased with rising wafer production in 2Q09, but were offset by the adoption of ROC SFAS No. 10, which allocated more fixed costs in 1Q09. As a result, other mfg. costs only increased by 2.3%. General and administration expenses decreased to NT$454 million, mainly due to the decrease in professional fees. Sales & marketing expenses dropped significantly to NT$376 million, mainly due to the collection of estimated bad debts that were charged as expenses in previous quarters. Therefore, total operating expenses decreased 10% to NT$2.69 billion. The total R&D expense was 8.2% of revenue in 2Q09.
Non-operating Income (Expenses)
(Amount: NT$ million) 2Q09 1Q09 2Q08
Net Non-operating Income (Exp.) (901) (843) 98
Net Interest Income 17 37 160
Net Investment Loss (1,586) (1,079) (629)
Gain on Disposal of Investment 788 0 524
Exchange Gain (Loss) (141) 255 36
Others 21 (56) 7
Net non-operating losses during 2Q09 were NT$901 million. Net investment losses were NT$1.59 billion, mainly coming from other-than-temporary fixed asset impairment losses from UMCJ. Gain on disposal of investment of NT$788 million was from disposal of Mediatek holdings during 2Q09. The exchange loss of NT$141 million was partially offset by the valuation gain of forward contract. Therefore, the net exchange loss was NT$3.7 million.
Cash Flow Summary
For the For the
3-Month 3-Month
(Amount: NT$ Period Period
million) Ended Ended
Jun. 30, Mar. 31,
2009 2009
Cash Flow from Operations 3,420 3,746
Net Income (Loss) 1,547 (8,160)
Depreciation & Amortization 8,452 8,640
Changes in working capital (6,620) 3,051
Others 41 215
Cash Flow from Investing (1,326) (1,696)
Capital Expenditures (1,256) (1,568)
Others (70) (128)
Cash Flow from Financing 103 (2,393)
Long term loan 100 --
Purchase of treasury stock -- (2,393)
Others 3 --
Effect of exchange rate (199) 125
Net Cash Flow 1,998 (218)
Net cash inflow was NT$2 billion in 2Q09. Operating cash inflow was NT$3.42 billion. The investing cash outflow primarily reflects the CAPEX in 2Q09 of NT$1.26 billion. Free cash flow (Note 2) for 2Q09 and 1H09 was NT$2.16 billion and NT$4.35 billion, respectively. Over the next 12 months, UMC expects to repay NT$7.5 billion in term loans.
Note 2: Free cash flow = Operating cash flow - Capital expenditures
Current Assets
(Amount: NT$ billion) 2Q09 1Q09 2Q08
Cash & Cash Equivalents 37.90 35.91 25.42
Notes & Accounts Receivable 13.78 6.08 14.79
Days Sales Outstanding 40 58 50
Inventories 8.53 7.05 12.31
Avg. Inventory Turnover 42 45 56
Total Current Assets 63.90 51.50 58.37
