2007'02.11.Sun
SMIC Reports 2006 Third Quarter Results
October 31, 2006
* All currency figures stated in this report are in US
Dollars unless
stated otherwise.
* The financial statement amounts in this report are
determined in
accordance with US GAAP.
Overview:
-- Sales increased to $368.9 million in 3Q06, up 2.1%
from 2Q06 and up
19.0% from 3Q05.
-- Gross margins decreased to 8.9% in 3Q06 from 13.6%
in 2Q06.
-- Operating loss of $13.4 million in 3Q06.
-- Net loss of $35.1 million in 3Q06, compared to a net
income of $2.2
million from 2Q06 and a net loss of $26.1 million in
3Q05.
SHANGHAI, China, Oct. 31 /Xinhua-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, 2006. Sales increased
2.1% in the third quarter of 2006 to $368.9 million from
$361.4 million in the second quarter. The Company reported
an increase in capacity to 176,625 8-inch equivalent wafers
per month and a utilization rate of 84.3% in the third
quarter of 2006. Gross margins were 8.9% in the third
quarter of 2006 compared to 13.6% in the second quarter of
2006. Net loss of $35.1 million in the third quarter of
2006, compared to a net loss of $26.1 million in the third
quarter of 2005 and a net gain of $2.2 million in the
second quarter of 2006.
The Company is subject to a pending lawsuit with Taiwan
Semiconductor Manufacturing Company, Limited (“TSMC?,
related to the intangible assets, with a net book value of
$99.5 million, the Company recorded for patents licensed
from TSMC and TSMC’s covenant not to sue the Company
regarding certain allegations of acts of trade secret
misappropriation. Under SFAS 144, the Company is required
to make a determination as to whether or not this pending
litigation represents an event that requires a further
analysis of whether such assets have been impaired. We
believe that the lawsuit is at a very early stage and we
are still evaluating whether or not the litigation
represents such an event. The Company expects further
information to become available to us which will aid us in
making a determination. The outcome of any impairment
analysis performed under SFAS 144 might result in a
material impact on our financial positions and results of
operations.
“In the third quarter, our first 90 nanometer logic
product moved into mass production at our 300 millimeter
facility in Beijing,?said Dr. Richard Chang, Chief
Executive Officer of SMIC. “Elpida’s 512M-bit DDR2 DRAM
using the 90 nanometer manufacturing process also moved
into mass production. Our second 90 nanometer DRAM product
for Qimonda will go into commercial production in the fourth
quarter 2006. In the third quarter, 90 nanometer technology
contributed 4.9% of total wafer revenues.
We are also pleased to announce that SMIC entered into
a strategic agreement with Qualcomm. We will provide
integrated circuit manufacturing services to Qualcomm using
a specialized BiCMOS process technology at our Tianjin
facility. This agreement will combine SMIC’s wafer
fabrication capabilities and subcontractor infrastructure
with Qualcomm’s leadership in 3G wireless technologies,
with a focus on power management ICs.
We continue to see customers going through a period of
inventory correction carrying over into the fourth quarter.
This inventory situation is improving and depending on the
holiday sell-through, it may continue to improve.
As we manage for the long-term, we will continue to
march ahead towards the leading edge technology frontier.
We will continue to invest significantly in research and
development. Our development of the 65 nanometer
technology is expected to bear fruit in the second half of
2007. We will expand our business in a financially
disciplined manner with the clear goal of returning to
profitability.?
Conference Call / Webcast Announcement
Date: October 31, 2006
Time: 8:00 a.m. Shanghai time
Dial-in numbers and pass code: U.S. 1-617-597-5342 or
HK 852-3002-1672 (Pass code: SMIC).
A live webcast of the 2006 third quarter announcement
will be available at http://www.smics.com under the
“Investor Relations?section. An archived version of the
webcast, along with a soft copy of this news release will
be available on the SMIC website for a period of 12 months
following the webcast.
About SMIC
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) manufacturing service at 0.35mm to
90nm and finer line technologies. Headquartered in
Shanghai, China, SMIC operates three 200mm fabs in Shanghai
and one in Tianjin, and one 300mm fab in Beijing, the first
of its kind in Mainland China. SMIC has customer service
and marketing offices in the U.S., Italy, and Japan as well
as a representative office in Hong Kong. For additional
information, please visithttp://www.smics.com .
Safe Harbor Statements
(Under the Private Securities Litigation Reform Act of
1995)
This press release may contain, 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
“Capex Summary?and “Fourth Quarter 2006 Guidance?below, 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 are necessarily
estimates reflecting the best judgment of SMIC’s senior
management and 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 cyclicality and market
conditions in the semiconductor industry, intense
competition, timely wafer acceptance by SMIC’s customers,
timely introduction of new technologies, SMIC’s ability to
ramp new products into volume, supply and demand for
semiconductor foundry services, industry overcapacity,
shortages in equipment, components and raw materials,
availability of manufacturing capacity 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 Form 20-F,
as amended, filed with the SEC on June 29, 2006, especially
in the “Risk Factors?and “Management’s Discussion and
Analysis of Financial Condition and Results of
Operations?sections, and its registration statement on Form
A-1 as filed with the Stock Exchange of Hong Kong (SEHK) on
March 8, 2004, and such other documents that SMIC may file
with the SEC or SEHK from time to time, including 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 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.
Summary of Third Quarter 2006 Operating Results
Amounts in US$ thousands, except for EPS and operating
data
3Q06 2Q06 QoQ
3Q05 YoY
Sales 368,926 361,446 2.1 %
309,959 19.0 %
Cost of sales 336,160 312,229 7.7 %
284,686 18.1 %
Gross profit 32,766 49,217 -33.4 %
25,273 29.6 %
Operating expenses 46,190 56,141 -17.7 %
46,219 -0.1 %
Loss from operations (13,424) (6,924) 93.9 %
(20,946) -35.9 %
Other income (expenses) (20,947) (9,491)120.7 %
(4,742) 341.7 %
Income tax credit (expense) 3,048 18,892 -83.9 %
(6) --
Net income (loss) after
income taxes (31,323) 2,477 --
(25,694) 21.9 %
Minority interest (2,674) 767 --
439 --
Share of loss of affiliate
company (1,097) (1,002) 9.5 %
(860) 27.6 %
Income (loss) attributable
to holders of ordinary
shares (35,094) 2,242 --
(26,115) 34.4 %
Gross margin 8.9 % 13.6 %
8.2 %
Operating margin -3.6 % -1.9 %
-6.8 %
Net income (loss) per
ordinary share - basic(1) ($0.0019) $0.0001
($0.0010)
Net income (loss) per ADS -
basic ($0.0956) $0.0061
($0.0718)
Net income (loss) per
ordinary share - ($0.0019) $0.0001
($0.0010)
diluted(1)
Net income (loss) per ADS -
diluted ($0.0956) $0.0060
($0.0718)
Wafers shipped (in 8?
wafers)(2) 413,985 388,498 6.6 %
355,664 16.4 %
Logic ASP(3) $949 $979 -3.1 %
$989 -4.0 %
Blended ASP $851 $888 -4.2 %
$841 1.2 %
Simplified ASP(4) $891 $930 -4.2 %
$871 2.3 %
Capacity utilization 84.3 % 93.5 %
92.1 %
Note:
(1) Based on weighted average ordinary shares of
18,356 million in 3Q06,
18,303 million (basic) and 18,729 million
(diluted) in 2Q06 and
18,180 million in 3Q05
(2) Including copper interconnects
(3) Excluding copper interconnects
(4) Total sales/total wafers shipped
-- Sales increased to $368.9 million in 3Q06, up 2.1%
QoQ from $361.4
million in 2Q06 and up 19.0% YoY from $310.0 million
in 3Q05 primarily
due to increased 8-inch equivalent wafer shipments
of 413,985, up 6.6%
QoQ from 388,498 in 2Q06.
-- Cost of sales increased to $336.2 million in 3Q06,
up 7.7% QoQ from
$312.2 million in 2Q06, primarily due to an increase
in wafer shipments
and an increase in depreciation.
-- Gross profit decreased to $32.8 million in 3Q06,
down 33.4% QoQ from
$49.2 million in 2Q06, and up 29.6% YoY from $25.3
million in 3Q05.
The QoQ decrease was primarily due to general
pricing weakness,
decreased utilization, and increased depreciation.
-- Gross margins decreased to 8.9% in 3Q06 from 13.6%
in 2Q06 primarily
due to general pricing weakness, decreased
utilization, and increased
depreciation.
-- R&D expenses increased to $27.3 million in 3Q06,
up 12.2% QoQ from
$24.3 million in 2Q06, primarily due to 65nm R&D
activities and a
decrease in R&D subsidies.
-- G&A expenses including foreign exchange
decreased to $4.2 million in
3Q06 from $16.8 million in 2Q06 primarily due to a
foreign exchange
gain of $2.3 million in 3Q06 relating to operating
activities, a
decrease in the provision for doubtful debts, a tax
reversal, and a
legal fee reversal.
-- Selling & marketing expenses decreased to $3.6
million in 3Q06, down
7.8% QoQ from $3.9 million in 2Q06, primarily due to
a decrease in
engineering material expenses associated with
selling activities.
-- Amortization of acquired intangible assets of $11.0
million in 3Q06
representing amortization expenses associated with
the acquired
intangible assets.
-- Loss from operations increased to a loss of $13.4
million in 3Q06, up
93.9% QoQ from $6.9 million in 2Q06 and down from a
loss of $20.9
million in 3Q05.
-- Other non-operating loss of $20.9 million in 3Q06 up
120.7% QoQ from a
loss of $9.5 million in 2Q06, primarily due to a
foreign exchange loss
of $12.3M.
-- Interest expenses of $12.2 million in 3Q06, up 0.3%
QoQ from $12.2
million in 2Q06.
-- Net foreign exchange loss of $10.1 million based on
a foreign exchange
gain of $2.3 million in G&A and a foreign
exchange loss of $12.3
million relating to a non-operating activities
resulting from financing
or investment transactions classified as other
income (expenses).
-- Net loss increased to $35.1 million, compared to a
net income of $2.2
million in 2Q06 and a net loss of $26.1 million in
3Q05.
Analysis of Revenues
Sales Analysis
By Application 3Q06 2Q06 1Q06
4Q05 3Q05
Computer 33.0 % 30.6 % 36.0
% 34.8 % 33.7 %
Communications 37.1 % 46.2 % 45.8
% 43.8 % 39.8 %
Consumer 25.2 % 18.6 % 13.3
% 16.6 % 22.8 %
Others 4.7 % 4.6 % 4.9
% 4.8 % 3.7 %
By Device 3Q06 2Q06 1Q06
4Q05 3Q05
Logic (including copper
interconnect) 65.4 % 66.6 % 62.8
% 65.3 % 65.5 %
DRAM(1) 30.1 % 28.8 % 32.4
% 31.3 % 31.0 %
Other (mask making & probing,
etc.) 4.5 % 4.6 % 4.8
% 3.4 % 3.5 %
By Customer Type 3Q06 2Q06 1Q06
4Q05 3Q05
Fabless semiconductor companies 36.9 % 49.8 % 41.8
% 43.2 % 43.2 %
Integrated device manufacturers
(IDM) 50.4 % 41.9 % 52.8
% 51.7 % 52.8 %
System companies and others 12.7 % 8.3 % 5.4
% 5.1 % 4.0 %
By Geography 3Q06 2Q06 1Q06
4Q05 3Q05
North America 38.6 % 46.7 % 43.5
% 39.2 % 42.9 %
Asia Pacific (ex. Japan) 25.4 % 20.9 % 21.3
% 28.2 % 25.7 %
Japan 7.5 % 4.9 % 3.3
% 3.6 % 4.5 %
Europe 28.5 % 27.5 % 31.9
% 29.0 % 26.9 %
Wafer Revenue Analysis
By Technology (logic, DRAM & 3Q06 2Q06
1Q06 4Q05 3Q05
copper interconnect only)
0.09um 4.9 % 0.9 % --
-- --
0.13um 41.2 % 46.6 % 46.6
% 42.9 % 43.8 %
0.15um 7.2 % 4.7 % 8.7
% 5.2 % 2.7 %
0.18um 36.1 % 38.0 % 35.7
% 42.3 % 45.3 %
0.25um 2.6 % 2.0 % 1.6
% 3.3 % 3.1 %
0.35um 8.0 % 7.8 % 7.4
% 6.3 % 5.1 %
By Logic Only(1) 3Q06 2Q06 1Q06
4Q05 3Q05
0.09um 4.6 % 0.2 % --
-- --
0.13um(2) 11.1 % 22.3 % 13.3
% 10.9 % 14.7 %
0.15um 11.8 % 7.2 % 14.5
% 8.6 % 5.3 %
0.18um 55.3 % 55.8 % 57.7
% 65.3 % 67.4 %
0.25um 4.1 % 2.5 % 2.3
% 4.8 % 4.0 %
0.35um 13.1 % 12.0 % 12.2
% 10.4 % 8.6 %
Note:
(1) Excluding 0.13?m copper interconnects
(2) Represents revenues generated from manufacturing
full flow wafers
-- Percentage of sales from 0.09?m grew to 4.9% of
total wafer revenues in
3Q06.
-- Percentage of sales generated from Asia Pacific
(excluding Japan) and
Japan customers in 3Q06 increased to 25.4% and 7.5%,
respectively as
compared to 20.9% and 4.9% in 2Q06, respectively.
Capacity
Fab / (Wafer Size)
3Q06(1) 2Q06(1)
Fab 1 (8?
43,109 43,000
Fab 2 (8?
49,000 49,034
Fab 4 (12?
41,850 35,438
Fab 7 (8?
20,000 17,216
Total monthly wafer fabrication capacity
153,959 144,688
Copper Interconnects:
Fab 3 (8?
22,666 22,563
Total monthly copper interconnect
capacity
22,666 22,563
Note:
(1) Wafers per month at the end of the period in
8?wafers
-- As of the end of 3Q06, monthly capacity increased to
176,625 8-inch
equivalent wafers mainly due to the expansion at the
Beijing (Fab 4)
and Tianjin (Fab 7) sites.
Shipment and Utilization
8?equivalent wafers 3Q06 2Q06 1Q06
4Q05 3Q05
Wafer shipments including copper
interconnects 413,985 388,498
388,010 376,227 355,664
Utilization rate(1) 84.3 % 93.5 % 94.9
% 93.0 % 92.1 %
Note:
(1) Capacity utilization based on total wafer out
divided by estimated
capacity
-- Wafer shipments increased to 413,985 units of 8-inch
equivalent wafers
in 3Q06 up 6.6% QoQ from 388,498 units of 8-inch
equivalent wafers in
2Q06, and up 16.4% YoY from 355,664 8-inch
equivalent wafers in 3Q05.
-- Utilization rate decreased to 84.3%.
Detailed Financial Analysis
Gross Profit Analysis
Amounts in US$ thousands 3Q06 2Q06 QoQ
3Q05 YoY
Cost of sales 336,160 312,229 7.7 %
284,686 18.1 %
Depreciation 196,993 188,663 4.4 %
167,919 17.3 %
Other manufacturing
costs 139,167 123,566 12.6 %
116,767 19.2 %
Gross Profit 32,766 49,217 -33.4 %
25,273 29.6 %
Gross Margin 8.9 % 13.6 %
8.2 %
-- Cost of sales increased to $336.2 million in 3Q06,
up 7.7% QoQ from
$312.2 million in 2Q06, primarily due to an increase
in wafer shipments
and an increase in depreciation.
-- Gross profit decreased to $32.8 million in 3Q06,
down 33.4% QoQ from
$49.2 million in 2Q06 and up 29.6% YoY from $25.3
million in 3Q05. The
QoQ decrease was primarily due to general pricing
weakness, decreased
utilization, and increased depreciation.
-- Gross margins decreased to 8.9% in 3Q06 from 13.6%
in 2Q06, primarily
due to general pricing weakness, decreased
utilization, and increased
depreciation.
Operating Expense Analysis
Amounts in US$ thousands 3Q06 2Q06
QoQ 3Q05 YoY
Total operating expenses 46,190 56,141
-17.7 % 46,219 -0.1 %
Research and development 27,319 24,345
12.2 % 20,355 34.2 %
General and administrative 4,216 16,837
-75.0 % 10,526 -59.9 %
Selling and marketing 3,614 3,918
-7.8 % 4,677 -22.8 %
Amortization of intangible
Assets 11,041 11,041
-- 10,661 3.6 %
-- Total operating expenses were $46.2 million in 3Q06,
a decrease of
17.7% QoQ from $56.1 million in 2Q06.
-- R&D expenses increased to $27.3 million in 3Q06,
up 12.2% QoQ from
$24.3 million in 2Q06, primarily due to 65nm R&D
activities and a
decrease in R&D subsidies.
-- G&A expenses including foreign exchange
decreased to $4.2 million in
3Q06 from $16.8 million in 2Q06 primarily due to a
foreign exchange
gain of $2.3 million in 3Q06 relating to operating
activities, a
decrease in the provision for doubtful debts, a tax
reversal, and a
legal fee reversal.
-- Selling & marketing expenses decreased to $3.6
million in 3Q06, down
7.8% QoQ from $3.9 million in 2Q06, primarily due to
a decrease in
engineering material expenses associated with
selling activities.
-- Amortization of acquired intangible assets of $11.0
million in 3Q06
representing amortization expenses associated with
the acquired
intangible assets.
Other Income (Expenses)
Amounts in US$ thousands 3Q06 2Q06 QoQ
3Q05 YoY
Other income (expenses) (20,947) (9,491) 120.7
% (5,602) 273.9 %
Interest income 2,970 4,039 -26.5
% 3,278 -9.4 %
Interest expense (12,247) (12,214) 0.3
%(10,334) 18.5 %
Other, net (11,670) (1,316) 786.8
% 1,454 --
-- Other non-operating loss of $20.9 million in 3Q06 up
120.7% QoQ from a
loss of $9.5 million in 2Q06, primarily due to a
foreign exchange loss
of $12.3 million.
-- Interest expenses of $12.2 million in 3Q06, up 0.3%
QoQ from $12.2
million in 2Q06.
Liquidity
Amounts in US$ thousands
3Q06 2Q06
Cash and cash equivalents
555,326 584,643
Short term investments
52,442 3,487
Accounts receivable
265,522 257,248
Inventory
243,957 217,592
Others
40,500 25,956
Total current assets
1,157,747 1,088,926
Accounts payable
353,325 429,813
Short-term borrowings
45,000 118,284
Current portion of long-term debt
47,160 47,160
Others
137,391 114,636
Total current liabilities
582,876 709,893
Cash Ratio
1.0x 0.8x
Quick Ratio
1.5x 1.2x
Current Ratio
2.0x 1.5x
Capital Structure
Amounts in US$ thousands
3Q06 2Q06
Cash and cash equivalents
555,326 584,643
Short-term investment
52,442 3,487
Current portion of promissory note
29,493 29,242
Promissory note
91,314 90,537
Short-term borrowings
45,000 118,284
Current portion of long-term debt
47,160 47,160
Long-term debt
963,139 830,743
Total debt
1,055,299 996,187
Net cash
(568,338) (527,836)
Shareholders?equity 2,999,854
3,028,259
Total debt to equity ratio 35.2
% 32.9 %
Cash Flow Summary
Amounts in US$ thousands
3Q06 2Q06
Net income (loss)
(35,094) 2,242
Depreciation & amortization
225,755 220,242
Amortization of acquired intangible
assets
11,041 11,041
Net change in cash
(29,318) 99,523
Capex Summary
-- Capital expenditures for 3Q06 was $157.4M.
-- Total planned capital expenditures for 2006 will be
approximately $1.0
billion.
Fourth Quarter 2006 Guidance
The following statements are forward looking statements
which are based on current expectation and which involve
risks and uncertainties, some of which are set forth under
“Safe Harbor Statements?above.
-- Sales expected to increase slightly by 1% to 2% over
3Q06.
-- Gross margins expected to be in the 9% to 11%
range.
-- Operating expense as a percentage of sales expected
to be in the 12% to
15% range.
-- Non-operating interest expense expected to be in the
$14 million to $17
million range.
-- Capital expenditures expected to be approximately
$300 million to $320
million.
-- Depreciation and amortization expected to be
approximately $255 million
to $260 million.
Recent Highlights and Announcements
-- Announcement of Unaudited Interim Results for the
Six Months Ended June
30, 2006[2006-09-21]
-- SMIC Denies Allegations and Files Cross-Complaint
Against TSMC [2006-
09-13]
-- SMIC and Magma Announce Availability of Integrated
Advanced Reference
Flow for SMIC 90-Nanometer Low-Power Process
[2006-09-12]
-- SMIC Holds Technology Symposium 2006 in Shanghai
[2006-09-08]
-- SMIC Participates in 4th Annual IC China Exhibition
and Conference
[2006-09-06]
-- CADENCE and SMIC Deliver 90-Nanometer Low-Power
Solution for Energy-
Efficient SOC [2006-09-06]
-- SMIC and VERISILICON Announced Release of A Standard
Design Platform
For SMIC’S 0.13u Low Leakage Process [2006-09-06]
-- SMIC AND SYNOPSYS DELIVER REFERENCE DESIGN FLOW 3.0
FOR 90-NANOMETER
DESIGNS [2006-09-05]
-- Matters in respect of settlement agreement with
TSMC[2006-08-28]
-- Change of Address of Principal Place of Business in
Hong Kong[2006-08-
28]
-- SMIC Reports 2006 Second Quarter Results
[2006-07-28]
Please visit SMIC’s website at
http://www.smics.com/website/enVersion/Press_Center/pressRelease.jsp
for further details regarding the recent announcements.
Semiconductor Manufacturing International Corporation
CONSOLIDATED BALANCE SHEET
(In US dollars)
As of
the end of
September 30,
2006 June 30, 2006
(unaudited)
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents 555,325,635
584,643,407
Short term investments 52,441,975
3,486,997
Accounts receivable, net of
allowances of $4,068,373 and
$4,360,447, respectively 265,522,541
257,248,338
Inventories 243,956,844
217,592,385
Prepaid expense and other
current assets 25,624,762
20,171,994
Assets held for sale 14,875,528
5,782,422
Total current assets 1,157,747,285
1,088,925,543
Land use rights, net 38,180,494
39,975,613
Plant and equipment, net 3,295,734,677
3,378,265,128
Acquired intangible assets, net 172,279,451
183,230,540
Equity investment 14,663,371
15,760,166
Other long-term prepayments 4,568,174
4,957,320
Deferred tax assets 22,014,394
18,892,396
TOTAL ASSETS 4,705,187,846
4,730,006,706
LIABILITIES AND STOCKHOLDERS?EQUITY
Current liabilities:
Accounts payable 353,325,028
429,813,127
Accrued expenses and other
current liabilities 107,858,006
85,373,210
Short term borrowings 45,000,000
118,283,829
Current portion of promissory
note 29,492,873
29,242,001
Current portion of long term
debt 47,160,000
47,160,000
Income tax payable 39,875
20,548
Total current liabilities 582,875,782
709,892,715
Long-term liabilities:
Promissory note 91,314,355
90,537,615
Long-term debt 963,138,943
830,742,999
Long-term payables relating to
license agreements 21,597,408
23,507,429
Other Long Term Payable 6,666,667
10,000,000
Total long-term liabilities 1,082,717,373
954,788,043
Total liabilities 1,665,593,155
1,664,680,758
Minority interest 39,741,186
37,066,848
Stockholders?equity:
Ordinary shares, $0.0004 par
value, 50,000,000,000 shares
authorized, shares issued and
outstanding 18,402,634,216 and
18,342,734,332 respectively 7,361,054
7,337,094
Warrants 32,387
32,387
Additional paid-in capital 3,281,801,407
3,275,146,135
Accumulated other
comprehensive income (loss) 173,321
163,674
Accumulated deficit (289,514,664)
(254,420,190)
Total stockholders?equity 2,999,853,505
3,028,259,100
TOTAL LIABILITIES AND
STOCKHOLDERS?EQUITY 4,705,187,846
4,730,006,706
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF OPERATIONS
(In US dollars)
For the
three months ended
September 30,
2006 June 30, 2006
(unaudited)
(unaudited)
Sales 368,926,309
361,445,898
Cost of sales 336,160,028
312,229,121
Gross Profit 32,766,281
49,216,777
Operating expenses:
Research and development 27,319,652
24,344,979
General and administrative 4,215,807
16,837,020
Selling and marketing 3,613,868
3,918,343
Amortization of acquired
intangible assets 11,041,090
11,041,090
Total operating expenses 46,190,417
56,141,432
Loss from operations (13,424,136)
(6,924,655)
Other income (expenses):
Interest income 2,970,318
4,039,328
Interest expense (12,247,344)
(12,214,076)
Other income (expenses), net (11,669,620)
(1,316,005)
Total other income (expenses),
net (20,946,646)
(9,490,753)
Net loss before income taxes (34,370,782)
(16,415,408)
Income tax credit (expense) 3,047,443
18,891,787
Minority interest (2,674,339)
767,652
Loss from equity investment (1,096,796)
(1,002,169)
Net income (loss) atrributable
to holders of ordinary shares (35,094,474)
2,241,862
Net income (loss) per share, basic (0.0019)
0.0001
Net Income (loss) per ADS,
basic(1) (0.0956)
0.0061
Net income (loss) per share,
diluted (0.0019)
0.0001
Net income (loss) per ADS,
diluted(1) (0.0956)
0.0060
Ordinary shares used in
calculating basic income (loss)
per ordinary share (in
millions) 18,356
18,303
Ordinary shares used in
calculating diluted income
(loss) per ordinary share (in
millions) 18,356
18,729
*Share-based compensation related
to each account balance as
follows:
Cost of sales 2,840,286
3,014,596
Research and development 1,179,175
1,254,569
Selling and marketing 1,190,467
1,227,469
General and administrative 493,529
509,831
(1) 1 ADS equals 50 ordinary shares
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF CASH FLOWS
(In US dollars)
For the
three months ended
September 30,
2006 June 30, 2006
(unaudited)
(unaudited)
Operating activities
Net income (loss) (35,094,474)
2,241,862
Adjustments to reconcile net
income (loss) to net cash
provided by ( used in )
operating activities
Minority interest 2,674,339
(767,652)
Loss on disposal of plant and
equipment (872,422)
(516,812)
Depreciation and amortization 225,754,616
220,242,447
Amortization of acquired
intangible assets 11,041,090
11,041,089
Amortization of deferred stock
compensation 5,703,457
6,006,465
Amortization of loan initiation
fee 179,846
59,949
Non cash interest expense on
promissory notes 1,368,710
1,503,505
Loss on long-term investment 1,096,795
1,002,169
Changes in operating assets and
liabilities --
--
Accounts receivable (8,274,203)
(16,227,946)
Inventories (26,364,459)
(21,007,826)
Prepaid expenses and other
current assets (5,243,468)
(316,206)
Accounts payable 7,039,215
(13,274,229)
Accrued expenses and other
current liabilities 24,167,325
(11,319,565)
Other long term liabilities (3,333,333)
10,000,000
Income tax payable 19,327
(73,086)
Deferred tax assets (3,121,998)
(18,892,396)
Net cash provided by operating
activities 196,740,363
169,701,768
Investing activities:
Purchases of plant and equipment (241,450,500)
(164,934,281)
Purchases of acquired intangible
assets (3,553,501)
(253,074)
Sale of short-term investments 25,384,332
30,704
Purchase of short-term
investments (74,329,245)
--
Proceeds from disposal of plant
and equipment 2,327,095
17,479
Proceeds received from Living
Quarter sales 5,476,213
5,631,255
Net cash used in investing
activities (286,145,606)
(159,507,917)
Financing activities:
Proceeds from short term
borrowings 75,717,105
83,161,736
Proceeds from long-term debt 132,395,944
592,960,001
Repayment of long-term debt --
(392,642,286)
Repayment of promissory notes --
(15,000,000)
Repayment of short-term
borrowings (149,000,934)
(176,485,809)
Payment of loan initiation fee --
(3,596,938)
Proceeds from exercise of
employee stock options 990,365
883,777
Repurchase of restricted
ordinary shares (14,589)
--
Net cash provided by financing
activities 60,087,891
89,280,481
Effect of exchange rate changes (420)
48,510
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (29,317,772)
99,522,842
CASH AND CASH EQUIVALENTS -
beginning of period 584,643,407
485,120,565
CASH AND CASH EQUIVALENTS - end
of period 555,325,635
584,643,407
For more information, please contact:
Investor Contacts:
Peter Yu
Tel: +86-21-5080-2000 x11319
Mobile: +86-139-1894-0553
Email: peter_yu@smics.com
Douglas Hsiung
Tel: +86-21-5080-2000 x12804
Mobile: +86-137-9527-2240
Email: douglas_hsiung@smics.com
SOURCE Semiconductor Manufacturing International
Corporation
PR
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