-- 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.
SHANGHAI, China, July 26 /Xinhua-PRNewswire-FirstCall/ -- 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 June 30, 2007.
(Logo: http://www.prnasia.com/sa/200611101605-min.jpg )
Second Quarter 2007 Highlights:
-- Revenue increased by 3.7% over 2Q06 to $374.8 million, but decreased by
3.5% from $388.3 million in 1Q07.
-- Gross margins were 10.3% in 2Q07 compared to 9.5% in 1Q07.
-- Net loss of $2.1 million in 2Q07, compared to a net income of $8.8
million in 1Q07.
-- Fully diluted EPS was ($0.0056) per ADS.
-- Contribution from 90nm production increased to 22.0% of wafer revenue
in 2Q07 compared to 14.4% in 1Q07.
Commenting on the results, Dr. Richard Chang, Chief Executive Officer of SMIC stated, “SMIC continued to expand its foundry business in the second quarter of 2007. The Company posted increasing revenues year-on-year, but declining revenues quarter-on-quarter due to difficult pricing pressures in the DRAM market.
Looking at the recent market trends, mobile phone applications continue to grow in demand as well as in variety. We also see strong foundry demand for power management ICs and consumer applications such as personal multimedia players and MP3 and MPEG4 applications.
In terms of technology, we saw an increase in revenues at 90-nanometer to 22% of wafer revenue, up from 14% in the first quarter of 2007, and up from less than 1% in the second quarter of 2006. For the third quarter of 2007, we expect total revenue to increase 2% to 5% while revenue contribution from the 90-nanometer node will continue to increase.
We are currently developing an 8Gb NAND flash product and the 2Gb NAND flash product is expected to reach the market in the second half of this year. This milestone demonstrates SMIC’s technological and manufacturing capabilities and strategically positions SMIC as one of the foundry service providers in the NAND flash market.
Our technology roadmap is on track and we are making good progress in the development of the 65-nanometer technology. We expect to enter pilot production for our 65-nanometer logic technology by the end of this year. In addition to the development of the 65-nanometer logic technology, we expect our DRAM product will start to convert to below 90-nanometer by the end of this year.
We remain committed to improving profitability, accelerating our growth and strategically identifying opportunities to enhance shareholder value in our company. We believe the continued prudent development of advanced technology nodes for leading customers will position SMIC for continual growth and improved profitability in the second half of 2007 and the year 2008.”
Conference Call / Webcast Announcement
Date: July 27, 2007
Time: 7:30 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 2007 second quarter announcement will be available at http://www.smics.com under the “Investor Relations” section. 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) manufacturing service at 0.35 mm to 90nm and finer line technologies. Headquartered in Shanghai, SMIC operates three 200mm wafer fabrication facilities in its Shanghai mega-fab, a 200mm wafer fab in Tianjin, and a 300mm mega-fab in Beijing, the first of its kind in Mainland China. SMIC also operates an in-house assembly and testing facility in Chengdu. SMIC has customer service and marketing offices in the U.S., Italy, and Japan as well as a representative office in Hong Kong. In addition, SMIC manages and operates a 200mm wafer fab owned by Chengdu Cension Semiconductor Manufacturing Corporation and one 300mm wafer fab owned by Wuhan Xinxin Semiconductor Manufacturing Corporation. F or additional information, please visit http://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 concerning our expectation for third quarter 2007 revenue and continued increase in revenue contribution from 90nm sales, expected timing for products or products in development to reach market or be in commercial production, expected timing for entering pilot production for our 65nm technology, expected timing for our DRAM product to start to convert to below 90nm, SMIC’s ability to grow and improve profitability in the second half of 2007 and 2008, and statements under “Capex Summary” and “Third Quarter 2007 Guidance”, 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 20-F, as amended, filed with the SEC on June 29, 2007, 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.
Material Litigation
Recent TSMC Legal Developments:
On August 25, 2006, TSMC filed a lawsuit against the Company and certain subsidiaries (SMIC (Shanghai), SMIC (Beijing) and SMIC (Americas)) in the Superior Court of the State of California, County of Alameda for alleged breach of the Settlement Agreement, alleged breach of promissory notes and alleged trade secret misappropriation by the Company. TSMC seeks, among other things, damages, injunctive relief, attorneys’ fees, and the acceleration of the remaining payments outstanding under the Settlement Agreement.
In the present litigation, TSMC alleges that the Company has incorporated TSMC trade secrets in the manufacture of the Company’s 0.13-micron or smaller process products. TSMC further alleges that as a result of this claimed breach, TSMC’s patent license is terminated and the covenant not to sue is no longer in effect with respect to the Company’s larger process products.
The Company has vigorously denied all allegations of misappropriation. Moreover, TSMC has not yet proven, nor produced evidence of, any trade secret misappropriation by the Company. At present, the claims rest as unproven allegations, denied by the Company. The Court has made no finding that TSMC’s claims are valid, nor has it set a trial date.
On September 13, 2006, the Company announced that in addition to filing a response strongly denying the allegations of TSMC in the United States lawsuit, it filed on September 12, 2006, a cross-complaint against TSMC seeking, among other things, damages for TSMC’s breach of contract and breach of implied covenant of good faith and fair dealing.
On November 16, 2006, the High Court in Beijing, the People’s Republic of China, accepted the filing of a complaint by the Company and its wholly-owned subsidiaries, SMIC (Shanghai) and SMIC (Beijing), regarding the unfair competition arising from the breach of bona fide (i.e. integrity, good faith) principle and commercial defamation by TSMC (“PRC Complaint”). In the PRC Complaint, the Company is seeking, among other things, an injunction to stop TSMC’s infringing acts, public apology from TSMC to the Company and compensation from TSMC to the Company, including profits gained by TSMC from their infringing acts.
In March 2007, the California Court denied TSMC’s motion to enjoin the PRC action. TSMC has appealed this ruling to the California Court of Appeal.
Under the provisions of 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 the patent license portfolio has 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 to our financial position and results of operations.
Summary of Second Quarter 2007 Operating Results
Amounts in US$ thousands, except for EPS and operating data
2Q07 1Q07 QoQ 2Q06(3) YoY
Revenue 374,829 388,284 -3.5 % 361,446 3.7 %
Cost of sales 336,339 351,345 -4.3 % 318,116 5.7 %
Gross profit 38,490 36,940 4.2 % 43,330 -11.2 %
Operating expenses 47,113 21,722 116.9 % 50,624 -6.9 %
Income (Loss) from operations (8,623) 15,218 -- (7,293) 18.2 %
Other income (expenses), net 6,085 (12,187) -- (10,007) --
Income tax credit 1,621 5,964 -72.8 % 18,892 -91.4 %
Net income (loss) after
income taxes (917) 8,995 -- 1,591 --
Minority interest (137) 977 -- 768 --
Share of loss of affiliate
company (1,001) (1,212) -17.4 % (1,002) -0.1 %
Income (loss) attributable to
holders of ordinary shares (2,054) 8,760 -- 1,356 --
Gross margin 10.3 % 9.5 % 12.0 %
Operating margin -2.3 % 3.9 % -2.0 %
Net income (loss) per ordinary
share - basic(1) (0.0001) 0.0005 0.0001
Net income (loss) per ADS -
basic (0.0056) 0.0237 0.0001
Net income (loss) per ordinary
share - diluted(1) (0.0001) 0.0005 0.0001
Net income (loss) per ADS -
diluted (0.0056) 0.0234 0.0001
Wafers shipped (in 8”
wafers)(2) 443,445 450,592 -1.6 % 388,498 14.1 %
Capacity utilization 88.9 % 86.2 % 93.5 %
Note:
(1) Based on weighted average ordinary shares of 18,477 million (basic)
and18,477 million (diluted) in 2Q07, 18,451 million (basic) and 18,705
million (diluted) in 1Q07, and 18,303 million (basic) and 18,729
million(diluted) in 2Q06
(2) Including copper interconnects
(3) As restated
-- Revenue decreased to $374.8 million in 2Q07, down 3.5% QoQ from $388.3
million in 1Q07 and up 3.7% YoY from $361.4 million in 2Q06. The
decrease in revenue is primarily due to the downturn in the DRAM
market.
-- Cost of sales decreased to $336.3 million in 2Q07, down 4.3% QoQ from
$351.3 million in 1Q07, primarily due to higher utilization and lower
depreciation expenses.
-- Gross profit increased to $38.5 million in 2Q07, up 4.2% QoQ from $36.9
million in 1Q07 and down 11.2% YoY from $43.3 million in 2Q06.
-- Gross margins increased to 10.3% in 2Q07 from 9.5% in 1Q07 primarily
due to higher utilization and lower depreciation expenses.
-- Total operating expenses increased to $47.1 million in 2Q07 from $21.7
million, an increase of 116.9% QoQ, primarily due to income from sale
of plant and equipment that was recorded in 1Q07. Excluding the sale
of plant of equipment, total operating expenses fell by 1.1% in 2Q07 as
compared to 1Q07.
-- R&D expenses increased to $23.2 million in 2Q07, up 6.7% from $21.7
million due to the R&D cost relating to the new 12-inch project in
Shanghai.
-- G&A expenses decreased to $14.7 million in 2Q07 from $17.1 million in
1Q07 primarily due to foreign exchange gain arising from operating
activities.
-- Selling & marketing expenses increased to $4.2 million in 2Q07, up 8.8%
QoQ from $3.9 million in 1Q07.
Analysis of Revenue
Sales Analysis
By Application 2Q07 1Q07 2Q06
Computer 25.2 % 33.0 % 30.6 %
Communications 40.7 % 41.3 % 46.2 %
Consumer 24.3 % 18.3 % 18.6 %
Others 9.8 % 7.4 % 4.6 %
By Service Type 2Q07 1Q07 2Q06
Logic(3) 61.8 % 58.2 % 66.6 %
DRAM 28.9 % 34.7 % 28.8 %
Management services 3.2 % 3.2 % 0.2 %
Mask making, testing, others 6.1 % 3.9 % 4.4 %
By Customer Type 2Q07 1Q07 2Q06
Fabless semiconductor companies 43.8 % 47.1 % 49.8 %
Integrated device manufacturers (IDM) 42.3 % 43.2 % 41.9 %
System companies and others 13.9 % 9.7 % 8.3 %
By Geography 2Q07 1Q07 2Q06
North America 39.6 % 40.6 % 46.7 %
Asia Pacific (ex. Japan) 29.1 % 24.2 % 20.9 %
Japan 8.9 % 9.9 % 4.9 %
Europe 22.4 % 25.2 % 27.5 %
Wafer Revenue Analysis
By Technology (logic, DRAM & copper
interconnect only) 2Q07 1Q07 2Q06
0.09mum 22.0 % 14.4 % 0.9 %
0.13mum 33.0 % 38.1 % 46.6 %
0.15mum 1.2 % 2.9 % 4.7 %
0.18mum 30.8 % 34.1 % 38.0 %
0.25mum 0.7 % 0.7 % 2.0 %
0.35mum 12.3 % 9.8 % 7.8 %
By Technology (Logic Only)(1) 2Q07 1Q07 2Q06
0.09mum 15.3 % 10.0 % 0.2 %
0.13mum(2) 19.0 % 17.6 % 22.3 %
0.15mum 1.9 % 4.7 % 7.2 %
0.18mum 43.6 % 50.1 % 55.8 %
0.25mum 0.9 % 1.0 % 2.5 %
0.35mum 19.3 % 16.6 % 12.0 %
Note:
(1) Excluding 0.13mum copper interconnects
(2) Represents revenues generated from manufacturing full flow wafers
(3) Including 0.13mum copper interconnects
Capacity
Fab / (Wafer Size) 2Q07* 1Q07*
Shanghai Mega Fab (8")(1) 94,000 98,000
Beijing Mega Fab (12")(2) 54,000 57,150
Tianjin Fab (8") 21,000 22,000
Total monthly wafer fabrication capacity 169,000 177,150
Note:
* Wafers per month at the end of the period in 8” wafers
(1) Shanghai Mega Fab is comprised of Fab 1, Fab 2, and Fab 3
(2) Beijing Mega Fab is comprised of Fab 4, Fab 5, and Fab 6
-- Total capacity decreased to 169,000 8-inch wafer equivalent per month
at the end of 2Q07 due to the change in product mix.
Shipment and Utilization
8” equivalent wafers 2Q07 1Q07 2Q06
Wafer shipments including copper
interconnects 443,445 450,592 388,498
Utilization rate(1) 88.9 % 86.2 % 93.5 %
Note:
(1) Capacity utilization based on total wafer out divided by estimated
capacity
-- Wafer shipments decreased to 443,445 units of 8-inch equivalent wafers
in 2Q07 down 1.6% QoQ from 450,592 units of 8-inch equivalent wafers in
1Q07, and up 14.1% YoY from 388,498 8-inch equivalent wafers in 2Q06.
Detailed Financial Analysis
Gross Profit Analysis
Amounts in US$ thousands 2Q07 1Q07 QoQ 2Q06 YoY
Cost of sales 336,339 351,345 -4.3 % 318,116 5.7 %
Depreciation 159,154 185,707 -14.3 % 188,663 -15.6 %
Other manufacturing costs 168,408 157,279 7.1 % 120,552 39.7 %
Deferred cost amortization 5,886 5,886 -- 5,886 --
Share-based compensation 2,891 2,473 16.9 % 3,015 -4.1 %
Gross Profit 38,491 36,940 4.2 % 43,330 -11.2 %
Gross Margin 10.3 % 9.5 % -- 12.0 % --
-- Cost of sales decreased to $336.3 million in 2Q07, down 4.3% QoQ from
$351.3 million in 1Q07, primarily due to higher utilization and lower
depreciation expenses.
-- Gross profit increased to $38.5 million in 2Q07, up 4.2% QoQ from $36.9
million in 1Q07 and down 11.2% YoY from $43.3 million in 2Q06.
-- Gross margins increased to 10.3% in 2Q07 from 9.5% in 1Q07 primarily
due to higher utilization and lower depreciation expenses.
Operating Expense Analysis
Amounts in US$ thousands 2Q07 1Q07 QoQ 2Q06 YoY
Total operating expenses 47,113 21,722 116.9 % 50,624 -6.9 %
Research and development 23,194 21,733 6.7 % 24,345 -4.7 %
General and administrative 14,746 17,087 -13.7 % 16,837 -12.4 %
Selling and marketing 4,234 3,893 8.8 % 3,918 8.1 %
Amortization of intangible
assets 6,213 6,229 -0.3 % 6,040 2.9 %
Income from disposal of
properties (1,274) (27,220) -95.3 % (516) 146.9 %
-- Total operating expenses increased to $47.1 million in 2Q07 from $21.7
million, an increase of 116.9% QoQ, primarily due to income from sale
of plant and equipment that was recorded in 1Q07. Excluding the sale
of plant and equipment, total operating expenses decreased 1.1% QoQ.
-- R&D expenses increased to $23.2 million in 2Q07, up 6.7% from $21.7
million due to the R&D cost relating to the new 12-inch project in
Shanghai.
-- G&A expenses decreased to $14.7 million in 2Q07 from $17.1 million in
1Q07 primarily due to foreign exchange gain arising from operating
activities.
-- Selling & marketing expenses increased to $4.2 million in 2Q07, up 8.8%
QoQ from $3.9 million in 1Q07.
Other Income (Expenses)
Amounts in US$ thousands 2Q07 1Q07 QoQ 2Q06 YoY
Other income (expenses) 6,085 (12,187) -- (10,007) --
Interest income 2,679 1,972 35.9 % 4,039 -33.7 %
Interest expense 3,343 (15,003) -- (12,214) --
Other, net 63 844 -92.5 % (1,832) --
-- Other non-operating gain of $6.1 million in 2Q07 as compared to a loss
of $12.2 million in 1Q07, primarily due to government interest
subsidies received in conjunction with the ramp-up of the 12-inch fabs.
Liquidity
Amounts in US$ thousands 2Q07 1Q07
Cash and cash equivalents 372,449 341,704
Short term investments 73,080 79,830
Accounts receivable 300,379 288,027
Inventory 237,966 237,619
Others 125,413 128,080
Total current assets 1,109,287 1,075,260
Accounts payable 483,925 237,135
Short-term borrowings 108,000 43,000
Current portion of long-term debt 290,533 170,839
Others 124,086 138,758
Total current liabilities 1,006,544 589,732
Cash Ratio 0.4x 0.6x
Quick Ratio 0.7x 1.2x
Current Ratio 1.1x 1.8x
-- Accounts payable increase primarily due to advanced equipment purchases
for 12-inch fabs.
Capital Structure
Amounts in US$ thousands 2Q07 1Q07
Cash and cash equivalents 372,449 341,704
Short-term investment 73,080 79,830
Current portion of promissory note 29,242 29,493
Promissory note 64,443 78,267
Short-term borrowings 108,000 43,000
Current portion of long-term debt 290,533 170,839
Long-term debt 574,564 719,697
Total debt 973,097 933,536
Shareholders’ equity 3,027,635 3,022,697
Total debt to equity ratio 32.1 % 30.9 %
Cash Flow
Amounts in US$ thousands 2Q07 1Q07
Net cash provided by operating activities 151,803 180,684
Net cash used in investing activities (145,605) (176,288)
Net cash provided by/used in financing 24,593 (26,331)
activities
Net change in cash 30,745 (21,916)
Capex Summary
-- Capital expenditures for 2Q07 were $370 million.
-- Total planned capital expenditures for 2007 will be approximately $720
million and will be adjusted based on market conditions.
Third Quarter 2007 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.
-- Revenues expected to increase 2% to 5% from the second quarter.
-- Depreciation and amortization expected to be approximately $190 million
to $195 million.
-- Capital expenditures expected to be approximately $150 million to $200
million.
-- Operating expense as a percentage of sales expected to be in the
mid-teens.
Recent Highlights and Announcements
-- Saifun Acquires 90nm Process Know-How from SMIC (2007-07-02)
-- Annual General Meeting Held on 23rd May, 2007 Poll Results (2007-05-25)
-- SMIC Participates in Signing Ceremony between U.S. and Chinese
Companies and U.S. - China Hi-Tech Cooperation Forum (2007-05-10)
-- Notice of Annual General Meeting (2007-04-30)
-- SMIC Reports 2007 First Quarter Results (2007-04-27)
Please visit SMIC’s website at http://www.smics.com/website/enVersion/Press_Center/pressRelease.jsp
for further details regarding the recent announcements.
Taylor Rafferty Associates, Inc.
Investor Relations and Financial Communications
Hong Kong
Ruby Yim
Managing Director
ruby.yim@taylor-rafferty.com
David Dambro
Director
david.dambro@taylor-rafferty.com
+852 3196 3712
New York
Dana Johnston
Director
dana.johnston@taylor-rafferty.com
+212 889 4350
SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEET
(In US dollars)
As of the end of
June 30, 2007 March 31, 2007
(unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents $372,449,095 $341,703,889
Short term investments 73,079,577 79,829,802
Accounts receivable, net of
allowances of $4,688,098 and
$3,924,775 at June 30,
2007 and at March 31,
2007, respectively 300,379,234 288,026,530
Inventories 237,966,018 237,619,469
Prepaid expense and other
current assets 13,059,060 17,161,431
Receivable for sale of plant and
equipment and other fixed assets 109,907,931 110,136,499
Assets held for sale 2,445,806 781,985
Total current assets 1,109,286,721 1,075,259,605
Land use rights, net 47,139,822 38,005,628
Plant and equipment, net 3,375,543,336 3,149,255,434
Acquired intangible assets, net 62,413,712 65,866,883
Deferred cost 82,410,154 88,296,594
Equity investment 11,407,056 12,408,090
Other long-term prepayments 3,551,063 3,748,557
Deferred tax assets 33,036,474 31,356,917
TOTAL ASSETS $4,724,788,338 $4,464,197,708
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $483,925,496 $237,134,879
Accrued expenses and other current
liabilities 94,683,683 109,059,238
Short-term borrowings 108,000,000 43,000,000
Current portion of promissory note 29,242,001 29,492,873
Current portion of long-term debt 290,533,471 170,839,010
Income tax payable 159,421 206,071
Total current liabilities 1,006,544,072 589,732,071
Long-term liabilities:
Promissory note 64,442,787 78,267,417
Long-term debt 574,563,677 719,697,029
Long-term payables relating to
license agreements 14,458,131 15,733,116
Deferred tax liabilities 184,367 246,695
Total long-term liabilities 653,648,962 813,944,257
Total liabilities $1,660,193,034 $1,403,676,328
Minority interest 36,960,657 37,824,139
Stockholders’ equity:
Ordinary shares,$0.0004 par value,
50,000,000,000 shares authorized,
shares issued and outstanding
18,493,184,050 and 18,470,356,166
respectively 7,397,274 7,388,146
Warrants 32,387 32,387
Additional paid-in capital 3,302,244,424 3,295,215,798
Accumulated other comprehensive
income 64,874 111,027
Accumulated deficit (282,104,312) (280,050,117)
Total stockholders’ equity 3,027,634,647 3,022,697,241
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY $4,724,788,338 $4,464,197,708
SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(In US dollars)
For the three months ended
June 30, 2007 March 31, 2007
(unaudited) (unaudited)
Sales 374,829,258 388,284,436
Cost of sales 336,338,574 351,344,670
Gross profit 38,490,684 36,939,766
Operating expenses:
Research and development 23,193,707 21,733,055
General and administrative 14,746,510 17,087,309
Selling and marketing 4,234,048 3,893,369
Amortization of acquired
intangible assets 6,213,171 6,228,616
Income from sale of plant and
equipment and other fixed assets (1,274,018) (27,220,665)
Total operating expenses 47,113,418 21,721,684
Income (loss) from operations (8,622,734) 15,218,082
Other income (expenses):
Interest income 2,678,460 1,971,672
Interest expense 3,343,327 (15,003,379)
Foreign currency exchange gain (loss) (1,514,169) 428,279
Other income, net 1,577,151 416,621
Total other income (expenses), net 6,084,769 (12,186,807)
Net income (loss) before income tax (2,537,965) 3,031,275
Income tax credit 1,621,322 5,964,124
Minority interest (136,518) 976,527
Loss from equity investment (1,001,034) (1,211,553)
Net income (loss) attributable
to holders of ordinary shares $(2,054,195) $8,760,373
Net income (loss) per share, basic (0.0001) 0.0005
Net income (loss) per ADS, basic (0.0056) 0.0237
Net income (loss) per share, diluted (0.0001) 0.0005
Net income (loss) per ADS, diluted (0.0056) 0.0234
Ordinary shares used in calculating
basic income (loss) per ordinary share
(in millions) 18,477 18,451
Ordinary shares used in calculating
diluted income (loss) per ordinary share
(in millions) 18,477 18,706
*Share-based compensation related
to each account balance as follows:
Cost of sales 2,890,848 2,472,770
Research and development 1,274,430 953,159
General and
administrative 1,291,079 1,105,667
Selling and marketing 549,542 465,250
SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(In US dollars)
For the three months ended
June 30, 2007 March 31, 2007
(Unaudited) (Unaudited)
Operating activities
Net income (loss) (2,054,195) 8,760,374
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Minority interest 136,518 (976,527)
Gain on disposal of plant and equipment (2,469,694) (27,220,665)
Depreciation and amortization 175,187,932 173,370,422
Amortization of acquired intangible
assets 6,213,171 6,228,615
Share-based compensation 6,005,899 4,996,846
Non cash interest expense
on promissory notes 1,195,552 1,207,020
Loss from equity investment 1,001,034 1,211,553
Changes in operating assets
and liabilities:
Accounts receivable, net (12,352,703) (35,841,556)
Inventories (346,549) 37,559,483
Prepaid expense and other current
assets (52,120) 8,328,367
Accounts payable (4,132,746) (6,657,095)
Accrued expenses and other
current liabilities (14,740,560) 18,951,309
Other long term liabilities -- (3,333,333)
Income tax paybable (46,650) 133,654
Deferred tax assets (1,679,557) (6,070,017)
Deferred tax liabilities (62,328) 35,782
Net cash provided by operating
activities 151,803,004 180,684,232
Investing activities:
Purchase of plant and equipment (159,994,428) (157,728,647)
Proceeds from disposal of plant and
equipment 9,121,739 1,823,994
Proceeds received from sale
of assets held for sale 2,501,868 3,963,708
Purchases of aquired intangible
assets (3,984,011) (2,468,200)
Purchase of short-term investments (15,006,035) (48,838,238)
Sale of short-term investments 21,756,260 26,959,039
Net cash used in investing activities (145,604,607) (176,288,344)
Financing activities:
Proceeds from short-term borrowing 105,000,000 2,000,000
Proceeds from long-term debt -- 168,165
Repayment of promissory notes (15,000,000) --
Repayment of long-term debt (25,438,892) --
Repayment of short-term debt (40,000,000) (30,000,000)
Proceeds from exercise of employee
stock options 1,031,855 1,500,918
Repurchase of redeemable preference
shares (1,000,000) --
Net cash provided by (used in)
financing activities 24,592,963 (26,330,917)
Effect of exchange rate changes (46,154) 19,187
NET DECREASE IN CASH AND CASH
EQUIVALENTS 30,745,206 (21,915,842)
CASH AND CASH EQUIVALENTS, beginning
of period 341,703,889 363,619,731
CASH AND CASH EQUIVALENTS, end
of period 372,449,095 341,703,889
For more information, please contact:
Investor Contacts:
Theresa Teng
Tel: +86-21-5080-2000 x16278
Mobile: +86-136-4177-0892
Email: Theresa_Teng@smics.com
Peter Yu
Tel: +86-21-5080-2000 x11319
Mobile: +86-139-1894-0553
Email: Peter_Yu@smics.com
Adam Weng
Tel: +86-21-5080-2000 x16275
Mobile: +86-135-6431-0303
Email: Adam_Weng@smics.com
