News Article
STATS ChipPAC provides update on Thailand plant
STATS ChipPAC Ltd affirms its outlook for the fourth quarter of 2011 previously issued on 28 October 2011 despite the recent floods that have affected their Thailand operations. As announced on 18 October 2011, our wholly-owned subsidiary, STATS ChipPAC (Thailand ) Ltd., which is situated at 101/32-33 Navanakorn Industrial Estate, Moo 20, Paholyothin Road, KM 46, Ampoe Klong Luang, Pathum Thani (the "Thailand Plant") has been suspended since 17 October 2011 due to the recent flood in Thailand.
As the flood water level is receding in the Navanakorn Industrial Estate, the Company has been able to gain access to the Thailand Plant and is in the process of assessing damages, evaluating recoverability of assets and planning restoration of the Thailand Plant for production. The Company is as yet unable to determine when full operations might resume at the Thailand Plant, and currently expects the Thailand Plant to remain suspended through January 2012, with partial factory operation in the first quarter of 2012. Meanwhile, the Company has set up a global support and recovery management team and engaged equipment restoration specialists to expedite the restoration of the Thailand Plant. The Company has also shifted production to its other manufacturing sites to support demand from its customers that are affected by the disruption of the Thailand Plant operations.
Despite that, the Company affirms its current outlook of net revenues in the fourth quarter of 2011 to be single digit decrease from prior quarter, with adjusted EBITDA1 in the range of 20% to 25% of revenue, and capital expenditure to be approximately $50 million to $60 million. The Thailand Plant suspension from 17 October 2011 to the end of December 2011 is expected to account for approximately 7% reduction in revenue for the fourth quarter of 2011 compared to the third quarter of 2011.
The outlook is subject to a number of risks and uncertainties that could cause actual events or results to differ materially from those disclosed in the outlook statements. These statements are based on our management's beliefs and assumptions, which involve judgments about future trends, events and conditions, all of which are subject to change and many of which are beyond our control. Please refer to our Financial Statements for the three and nine months ended 25 September 2011 filed with the Singapore Exchange Securities Trading Limited ("SGX-ST") for the major assumptions made in preparing our outlook for the fourth quarter of 2011. Investors should consider these assumptions and make their own assessment of the future performance of STATS ChipPAC and note that there may not be a direct correlation between the net income of the Company with adjusted EBITDA as a percentage of revenue.
