SAN FRANCISCO (Thomson Financial) - ReneSola Ltd. filed late Friday to offer 9 million American depositary shares.
The China-based solar wafer company said it is selling roughly 8.15 million ADSs, and shareholders are selling around 850,000 ADSs.
Each ADS represents two ordinary shares.
The selling shareholders have granted the underwriters an option to purchase up to 1.35 million ADSs to cover any over-allotments.
ReneSolsa expects to use $70 million from the proceeds to expand its solar wafer manufacturing facilities and purchase additional equipment for its wafer capacity expansion plan in 2008 and 2009; roughly $100 million to invest in polysilicon manufacturing production in 2008 and 2009; and the remaining amount for general corporate purposes.
The company will not receive any of the proceeds from the sale of ADSs by the selling shareholders.
Saturday, May 31, 2008
Yingli Green Energy signs sales contract
Associated Press 05.30.08, 6:23 PM ET YGE
NEW YORK - China-based Yingli Green Energy Holding Co. Ltd., which makes photovoltaic products, said Friday it signed a sales contract with S.A.G. Solarstrom Vertriebsgesellschaft mbH, a solar power company.
Under the terms of the deal, Yingli said it will supply 5.75 MW of photovoltaic modules to S.A.G. from June to September.
The company said the modules are expected to be installed in S.A.G.'s projects in Italy.
Yingli said the agreement was the company's eighth contract with S.A.G.
NEW YORK - China-based Yingli Green Energy Holding Co. Ltd., which makes photovoltaic products, said Friday it signed a sales contract with S.A.G. Solarstrom Vertriebsgesellschaft mbH, a solar power company.
Under the terms of the deal, Yingli said it will supply 5.75 MW of photovoltaic modules to S.A.G. from June to September.
The company said the modules are expected to be installed in S.A.G.'s projects in Italy.
Yingli said the agreement was the company's eighth contract with S.A.G.
Solar Thin Films Partners with China Singyes Holding
May 30, 2008
Solar Thin Films has signed a deal with China Singyes Holding to build out 100MW of module manufacturing capacity in China, the company said.
Solar Thin Films is a developer, manufacturer and marketer of manufacturing equipment for the production of "thin-film" amorphous silicon and CIGS photovoltaic modules. As per the deal, the company will supply equipment, technology and general engineering and design support, and retain certain rights outside of China to market and distribute building integrated photovoltaic (BIPV) products.
Solar Thin Films intends to install cost-effective thin-film photovoltaic manufacturing equipment through 2011. While equipment installation is expected to commence in the fourth quarter of 2008, the initial production and sale of BIPV products could begin in 2009.
Peter Lewis, chief executive officer of Solar Thin Films, said the proposed arrangement with China Singyes could be a significant step forward in their goal to become a leader in supplying cost-effective, thin film photovoltaic module manufacturing equipment.
Lewis added that combined with their recently announced $12.3 million order from Grupo Unisolar, to build a 5MW turn-key a-SI Module plant in Spain, it clearly shows the progress they are making. He finds this to be a terrific opportunity for them as China Singyes is one of the country's largest curtain wall engineering companies, with numerous projects inside and outside China, and a demonstrated commitment to expand an already existing presence in the solar field.
Solar Thin Films’ rights to market BIPV output from the new facility outside of China would also open new customer channels and markets for them within the construction industry.
Both the companies are currently minority shareholders and board members of CG Solar, a "thin-film" module manufacturing company located in Weihai, China, that utilizes equipment produced by Solar Thin Films.
Solar Thin Films has signed a deal with China Singyes Holding to build out 100MW of module manufacturing capacity in China, the company said.
Solar Thin Films is a developer, manufacturer and marketer of manufacturing equipment for the production of "thin-film" amorphous silicon and CIGS photovoltaic modules. As per the deal, the company will supply equipment, technology and general engineering and design support, and retain certain rights outside of China to market and distribute building integrated photovoltaic (BIPV) products.
Solar Thin Films intends to install cost-effective thin-film photovoltaic manufacturing equipment through 2011. While equipment installation is expected to commence in the fourth quarter of 2008, the initial production and sale of BIPV products could begin in 2009.
Peter Lewis, chief executive officer of Solar Thin Films, said the proposed arrangement with China Singyes could be a significant step forward in their goal to become a leader in supplying cost-effective, thin film photovoltaic module manufacturing equipment.
Lewis added that combined with their recently announced $12.3 million order from Grupo Unisolar, to build a 5MW turn-key a-SI Module plant in Spain, it clearly shows the progress they are making. He finds this to be a terrific opportunity for them as China Singyes is one of the country's largest curtain wall engineering companies, with numerous projects inside and outside China, and a demonstrated commitment to expand an already existing presence in the solar field.
Solar Thin Films’ rights to market BIPV output from the new facility outside of China would also open new customer channels and markets for them within the construction industry.
Both the companies are currently minority shareholders and board members of CG Solar, a "thin-film" module manufacturing company located in Weihai, China, that utilizes equipment produced by Solar Thin Films.
Yingli Green Energy Signs Silicon Agreement with New Producer
Yingli Green Energy (NYSE: YGE) has signed a polysilicon supply contract with Sailing New Energy Resources Co., Ltd., located in Chongqing, China. Under the terms of the contract, Sailing will supply polysilicon to Yingli Green Energy from 4Q08 through the end of 2010.
The total amount of polysilicon to be supplied under this contract will allow Yingli Green Energy to produce a total of 160 megawatts (MW) to 200 MW of PV modules, subject to the production ramp-up schedule of Sailing and further negotiations between the two companies, according to a Yingli Green Energy release.
"We are very confident in Sailing's ability to produce high purity polysilicon with the proven refined Siemens method and their high quality production lines," commented Liansheng Miao, Chairman and CEO of Yingli Green Energy. "This contract will further increase our visibility on polysilicon supply from 2008 to 2010."
Earlier this week, Baoding Yingli Group Company Limited, which is owned by Miao and affiliated with Yingli Green Energy, announced it is considering a project to produce 3,000 metric tons of polysilicon annually.
Earlier this year, Yingli Green Energy cancelled plans to build its own polysilicon plant.
About Yingli Green Energy
Yingli Green Energy Holding Company Limited is a vertically integrated PV product manufacturer. Through the Company's principal operating subsidiary in China, Baoding Tianwei Yingli New Energy Resources Co., Ltd., Yingli Green Energy designs, manufactures and sells PV modules and designs, assembles, sells and installs PV systems that are connected to an electricity transmission grid or those that operate on a stand-alone basis. With 200 MW of total annual production capacity in each of polysilicon ingots and wafers, PV cells and PV modules, Yingli Green Energy is currently one of the largest manufacturers of PV products in the world as measured by annual production capacity.
Yingli Green Energy currently plans to gradually expand annual production capacity of polysilicon ingots and wafers, PV cells and PV modules to 400 MW by the end of 2008 and to 600 MW by the end of 2009. Yingli Green Energy sells PV modules under its own brand name, Yingli Solar, to PV system integrators and distributors located in various markets around the world, including Germany, Spain, Italy, China and the United States.
The total amount of polysilicon to be supplied under this contract will allow Yingli Green Energy to produce a total of 160 megawatts (MW) to 200 MW of PV modules, subject to the production ramp-up schedule of Sailing and further negotiations between the two companies, according to a Yingli Green Energy release.
"We are very confident in Sailing's ability to produce high purity polysilicon with the proven refined Siemens method and their high quality production lines," commented Liansheng Miao, Chairman and CEO of Yingli Green Energy. "This contract will further increase our visibility on polysilicon supply from 2008 to 2010."
Earlier this week, Baoding Yingli Group Company Limited, which is owned by Miao and affiliated with Yingli Green Energy, announced it is considering a project to produce 3,000 metric tons of polysilicon annually.
Earlier this year, Yingli Green Energy cancelled plans to build its own polysilicon plant.
About Yingli Green Energy
Yingli Green Energy Holding Company Limited is a vertically integrated PV product manufacturer. Through the Company's principal operating subsidiary in China, Baoding Tianwei Yingli New Energy Resources Co., Ltd., Yingli Green Energy designs, manufactures and sells PV modules and designs, assembles, sells and installs PV systems that are connected to an electricity transmission grid or those that operate on a stand-alone basis. With 200 MW of total annual production capacity in each of polysilicon ingots and wafers, PV cells and PV modules, Yingli Green Energy is currently one of the largest manufacturers of PV products in the world as measured by annual production capacity.
Yingli Green Energy currently plans to gradually expand annual production capacity of polysilicon ingots and wafers, PV cells and PV modules to 400 MW by the end of 2008 and to 600 MW by the end of 2009. Yingli Green Energy sells PV modules under its own brand name, Yingli Solar, to PV system integrators and distributors located in various markets around the world, including Germany, Spain, Italy, China and the United States.
Wednesday, May 28, 2008
Canadian Solar Inc. Announces Conversion Offer for Its 6.0% Convertible Senior Notes due 2017
JIANGSU, China, May 27 /Xinhua-PRNewswire/ -- Canadian Solar Inc.(''CSI'') announced today the commencement of an offer to holders of CSI's 6.0% Convertible Senior Notes due 2017 to convert their notes into CSI's common shares at an increased conversion rate. The conversion offer is intended to reduce CSI's ongoing fixed interest obligations, and to improve the trading liquidity of its common shares by increasing the number of outstanding shares of common shares available for trading. CSI believes that a successful conversion offer may also facilitate a greater access to the equity capital markets for CSI, including through future offerings of convertible notes or other equity linked securities, and enable CSI to capitalize on opportunities for future growth. As of May 27, 2008, $75.0 million principal amount of the notes were outstanding.
The conversion offer will expire at 5:00 p.m., New York City time, on June 24, 2008, unless extended or earlier terminated. Holders who validly tendered their notes before the expiration of the offer will receive an enhanced conversion rate for each $1,000 principal amount of notes, of 50.6073 common shares, which is the current conversion rate, plus $117.00 in the form of additional common shares at the volume weighted average price of CSI's common shares for the ten trading days from and including June 3, 2008 to and including June 16, 2008.
Details of the conversion offer are set forth in a conversion offer memorandum and other materials filed with the Securities and Exchange Commission today on Schedule TO and are available on the SEC's website at http://www.sec.gov. CSI has appointed Georgeson Inc. as information agent in connection with the conversion offer. Any questions or request for assistance or for additional copies of the conversion offer memorandum or related documents may be directed to the information agent at GeorgesonInc., 199 Water Street, 26th Floor, New York, New York 10038, (800) 223-2064. Piper Jaffray acted as CSI's financial advisor in connection with the conversion offer, and can be contacted at (877) 371-5212.
This press release is not an offer or solicitation for the conversion of the notes into common shares. The conversion offer is being made only through the conversion offer memorandum and related materials filed with the SEC. These materials contain important information that should be read carefully before any decision is made with respect to the conversion offer.
The conversion offer will expire at 5:00 p.m., New York City time, on June 24, 2008, unless extended or earlier terminated. Holders who validly tendered their notes before the expiration of the offer will receive an enhanced conversion rate for each $1,000 principal amount of notes, of 50.6073 common shares, which is the current conversion rate, plus $117.00 in the form of additional common shares at the volume weighted average price of CSI's common shares for the ten trading days from and including June 3, 2008 to and including June 16, 2008.
Details of the conversion offer are set forth in a conversion offer memorandum and other materials filed with the Securities and Exchange Commission today on Schedule TO and are available on the SEC's website at http://www.sec.gov. CSI has appointed Georgeson Inc. as information agent in connection with the conversion offer. Any questions or request for assistance or for additional copies of the conversion offer memorandum or related documents may be directed to the information agent at GeorgesonInc., 199 Water Street, 26th Floor, New York, New York 10038, (800) 223-2064. Piper Jaffray acted as CSI's financial advisor in connection with the conversion offer, and can be contacted at (877) 371-5212.
This press release is not an offer or solicitation for the conversion of the notes into common shares. The conversion offer is being made only through the conversion offer memorandum and related materials filed with the SEC. These materials contain important information that should be read carefully before any decision is made with respect to the conversion offer.
Suntech Powers Up Its Solar Wafer Supply
Suntech is improving its wafer supply in hopes of becoming a leading manufacturer of solar modules.
On Tuesday, Suntech Power Holdings bought a $98.0 million stake in Shunda Holdings, a China-based solar wafer manufacturer. Details of the minority acquisition weren't disclosed except that the stake was purchased from Actis, a private equity investor in solar markets, and Waichun Investment Fund.
Suntech also signed a 13-year silicon wafer supply agreement with a Shunda subsidiary on Tuesday for an annual supply of silicon wafers with total volume of seven gigawatts through 2020.
"We believe that these transactions accelerate Suntech's path to grid parity and significantly enhance Suntech's long-term cost competitiveness through better pricing and volume allocations," said Suntech chairman, Dr. Zhengrong Shi, adding that the investment was made possible by funds raised through a convertible notes offering.
Suntech was drawn to Shunda because of the proximity and capacity of the company's new polysilicon plant, currently under construction in Yangzhou, Jiangsu province, where it will begin producing solar-grade polysilicon.
Suntech said that although the silicon wafers supplied by Shunda this year won't be initially significant to overall supply , they replace expensive spot market silicon.
"With this long-term agreement, we are able to increase our silicon secured for 2009 by 50 megawatts to 800 megawatts of silicon with an average cost more than 20.0% below our average cost of silicon in 2007," Suntech said. Silicon is often measured by how many watts of power it can provide. One megawatt, which is equal to one million watts, can power about 1000 homes at any given time.
On Tuesday, Suntech Power Holdings bought a $98.0 million stake in Shunda Holdings, a China-based solar wafer manufacturer. Details of the minority acquisition weren't disclosed except that the stake was purchased from Actis, a private equity investor in solar markets, and Waichun Investment Fund.
Suntech also signed a 13-year silicon wafer supply agreement with a Shunda subsidiary on Tuesday for an annual supply of silicon wafers with total volume of seven gigawatts through 2020.
"We believe that these transactions accelerate Suntech's path to grid parity and significantly enhance Suntech's long-term cost competitiveness through better pricing and volume allocations," said Suntech chairman, Dr. Zhengrong Shi, adding that the investment was made possible by funds raised through a convertible notes offering.
Suntech was drawn to Shunda because of the proximity and capacity of the company's new polysilicon plant, currently under construction in Yangzhou, Jiangsu province, where it will begin producing solar-grade polysilicon.
Suntech said that although the silicon wafers supplied by Shunda this year won't be initially significant to overall supply , they replace expensive spot market silicon.
"With this long-term agreement, we are able to increase our silicon secured for 2009 by 50 megawatts to 800 megawatts of silicon with an average cost more than 20.0% below our average cost of silicon in 2007," Suntech said. Silicon is often measured by how many watts of power it can provide. One megawatt, which is equal to one million watts, can power about 1000 homes at any given time.
Friday, May 23, 2008
12 years old little girl broke off her arm to save her classmates in the earthquake
My dear friends,
http://solar-in-china.blogspot.com/ is my blog for China's solar energy industry, and I did not plan to talk about other issues here. But since the 8.0 magnitude earthquake hit Wenchuan China, all Chinese people have been following the rescue operation progress, and hundreds of thousand people went to join the rescue and disaster relief operation, the whole nation is moved by lots of heart-broken stories, and I would like to share such stories here with you.
Chinese governemnt agencies, companies, and individuals are donating to help the victims, but 11,367,929 people have to leave their home and stay in the temporary living areas, the death toll is 55,740, and 292,481 people are injured, and 24,960 people are missing by May 23rd 12 am. Especially many children lost their parents, and many senior citizens lost their sons and daughters. These victims need our help, and I hope you may forward the earthquake information to your friends, and I hope you may pray for them, and help them in anyway if possible.
Now I would like to tell you a story about the earthquake.
Lexiao Bai is a 12 years old girl, and in the earthquake when she tried to run out of their classroom, her arm was clamped by the door of their classroom. In order to let her classmates behind her get out of the classroom, she pulled her arm to get her arm broken off. Her classmates are saved, but she lost a arm forever.
http://solar-in-china.blogspot.com/ is my blog for China's solar energy industry, and I did not plan to talk about other issues here. But since the 8.0 magnitude earthquake hit Wenchuan China, all Chinese people have been following the rescue operation progress, and hundreds of thousand people went to join the rescue and disaster relief operation, the whole nation is moved by lots of heart-broken stories, and I would like to share such stories here with you.
Chinese governemnt agencies, companies, and individuals are donating to help the victims, but 11,367,929 people have to leave their home and stay in the temporary living areas, the death toll is 55,740, and 292,481 people are injured, and 24,960 people are missing by May 23rd 12 am. Especially many children lost their parents, and many senior citizens lost their sons and daughters. These victims need our help, and I hope you may forward the earthquake information to your friends, and I hope you may pray for them, and help them in anyway if possible.
Now I would like to tell you a story about the earthquake.
Lexiao Bai is a 12 years old girl, and in the earthquake when she tried to run out of their classroom, her arm was clamped by the door of their classroom. In order to let her classmates behind her get out of the classroom, she pulled her arm to get her arm broken off. Her classmates are saved, but she lost a arm forever.
Suntech Reports First Quarter 2008 Financial Results
SAN FRANCISCO and WUXI, China, May 22 /Xinhua-PRNewswire/ -- SuntechPower Holdings Co., Ltd. (NYSE: STP), one of the world's leading manufacturers of photovoltaic (PV) cells and modules, today announced first quarter 2008 financial results.
First Quarter 2008 Highlights(1)
-- First quarter 2008 total net revenues grew 76.1% year-over-year to $434.5 million.
-- Consolidated gross margin increased to 22.2% for the first quarter 2008 compared to 19.0% for the first quarter of 2007. Non-GAAP(2) gross margin reached 22.5 % for the first quarter 2008, compared with 19.9% for the first quarter 2007.
-- Net income for the first quarter 2008 was $55.8 million or $0.33 per diluted American Depository Share (ADS). On a non-GAAP basis, Suntech's net income for the first quarter 2008 was $60.6 million or $0.35 per diluted ADS. Each ADS represents one ordinary share.
-- Suntech's PV cell production capacity was 540MW at the end of the first quarter of 2008. The Company is on track to reach 1GW PV cell production capacity by the end of 2008.
"We executed extremely well during the first quarter, despite the impact of the snowstorm, to deliver stronger than expected growth in net revenues and solid financial results," said Dr. Zhengrong Shi, Suntech's Chairman and CEO. "A vigorous demand environment in the major solar markets in Germany and Spain as well as in the emerging markets including South Korea and Italy drove strong pricing during the quarter. We expect demand to remain robust through 2008 and are virtually sold out for the full year."
Commenting on Suntech's silicon outlook, Dr. Shi said, "During the first quarter we leveraged the funds raised through our convertible senior notes offering to enhance our long term cost competitiveness with new and expanded polysilicon supply agreements and strategic investment in key suppliers. Our ability to secure reasonably priced silicon reflects our competitive strengths with respect to our leading market position, financial strength, and close relationships with upstream suppliers. We are confident that this improved silicon outlook will help us to achieve ourgoal of providing grid parity solar solutions."
"During the first quarter, we continued to hire impressive talent incurrent and developing international markets including Germany, Spain, France, Greece, Italy, South Korea and Australia. This will lay the infrastructure for the continued rapid growth in our business, and provide the flexibility to respond to changing market dynamics. We are confident that our strategy of developing a broad portfolio of superior quality solar products, world-class manufacturing facilities and techniques, deep sales channels and improving cost efficiencies will differentiate Suntech as a clear leader in the solar industry," concluded Dr. Shi.
Recent Business Highlights
Products and Projects
-- Suntech established a 4MW module supply agreement with Enerray, an Italian designer, developer and manager of photovoltaic systems. The Suntech modules will be installed by Enerray in PV systems for the roof tops of large Italian industrial complexes.
-- Subsequent to the close of the quarter, Suntech signed an agreement with Hanau Energies SAS to supply a 4.5MW building integrated PV system (BIPV) to a farm located in Alsace, France. The project will be one of the largest BIPV installations ever built and will employ Suntech's 'Just Roof' modules to form complete weather proof roofs on five agricultural warehouses.
Global Offices and Acquisitions
-- Suntech Australia was opened in April 2008 to focus on sales and business development in Australia, New Zealand and the Pacific Islands.
-- Suntech recently closed an acquisition of KSL-Kuttler Automation Systems GmbH ("KSL-Kuttler"), a leading manufacturer of automation systems for the Printed Circuit Board (PCB) industry. KSL-Kuttler will design, develop and supply primarily automation equipment employed in Suntech's manufacturing process. KSL-Kuttler will continue to manufacture and supply equipment for the PCB industry.
Silicon Procurement and Investment
-- Suntech announced the second phase of a strategic cooperative agreement with Nitol Solar, an independent polysilicon producer. Suntech will acquire a minority interest in Nitol Solar for a total consideration of up to $100 million. In addition, in an amendment to the original 7-year silicon supply contract, Nitol Solar has agreed to substantially increase the aggregate committed volumes to be supplied between 2009 and 2015.
-- An eight-year polysilicon supply agreement was established with DC Chemical Co. Ltd. to supply Suntech polysilicon with a total value of approximately $631 million from 2009 to 2016.
-- Suntech strengthened its relationship with Hoku Scientific, Inc. through an investment of approximately $20 million in a private placement offering, which included an amendment to the existing supply agreement that accelerated the delivery time and increased volume to be delivered under the agreement.
Financing
-- On March 17, 2008, Suntech completed an offering of $575 million of 3.00% Convertible Senior Notes due 2013. In the first quarter of 2008, Suntech leveraged the funds to improve long-term silicon prospects with new and expanded polysilicon supply agreements with Nitol Solar, DC Chemical and Hoku Materials and strategic investments in Nitol Solar and Hoku. Suntech expects to continue utilizing these funds to secure long term supply of favorably priced silicon to support future development.
Industry Recognition
-- Suntech was named Frost & Sullivan's 2008 Solar Energy Development Company of the Year in recognition of unparalleled excellence in design and delivery of high-quality PV cells and modules and customization of energy solutions catering to a global client base.
First Quarter 2008 Results
Non-GAAP Non-GAAP
Net Revenues Gross Profit Gross
(in $ % of Net (in $ Margin
millions) Revenues millions) (%)
Standard PV Modules $432.9 99.6% $98.2 22.7%
- Wafer to Modules 414.7 95.4% 96.6 23.3%
- Cell to Modules 18.2 4.2% 1.6 8.5%
Others 1.6 0.4% (0.3) (16.6%)
Total Net Revenues $434.5 100% $97.9 22.5%
Total net revenues for the first quarter of 2008 were $434.5 million, representing an increase of 76.1% from the corresponding period in 2007.
Non-GAAP gross profit for the first quarter of 2008 was $97.9 million, an increase of 98.9% year-over-year. Non-GAAP gross margin for the Company's core wafer-to-module business was 23.3% and non-GAAP consolidated gross margin was 22.5%. The gross margin increased from the fourth quarter of 2007 primarily due to an increase in the average selling price driven by strong demand for Suntech's solar products, which was partly offset by increased silicon wafer costs.
Non-GAAP operating expenses in the first quarter of 2008 totaled $31.0 million or 7.1% of total net revenues. Operating expenses increased from the fourth quarter of 2007 primarily due to an increase in expenses associated with the expansion of Suntech's global sales network, marketing associated expenses, bank service charges due to increased financing costs and bank commission charges in China, and bad debt provision on certain long-aging receivables.
Non-GAAP income from operations for the first quarter of 2008 was $66.9 million, an increase of 86.5% year-over-year. Non-GAAP operating margin was 15.4%.
Net interest expense was $4.0 million in the first quarter of 2008 compared to net interest income of $1.1 million in the fourth quarter of 2007. The sequential increase in net interest expenses was primarily due to an increase in the short-term borrowing balance to facilitate daily operations, a decrease in interest income resulting from the reduction of the interest rate by the U.S. Federal Reserve Bank, and an increase in average borrowing costs due to the worsening global credit market.
Foreign currency exchange gain was $2.9 million in the first quarter of 2008 compared to a foreign currency exchange loss of $3.7 million in the fourth quarter of 2007. The foreign currency exchange gain in the first quarter of 2008 was primarily due to the appreciation of the Euro against the USD coupled with an increase in Euro-denominated sales.
Non-GAAP net income for the first quarter of 2008 was $60.6 million, an increase of 85.2% year-over-year, or $0.35 per non-GAAP diluted ADS.
On a GAAP basis, for the first quarter of 2008 gross profit was $96.4 million, an increase of 105.2% year-over-year. Gross margin for the core wafer to module business was 23.0% and consolidated gross margin was 22.2% for the first quarter of 2008.
On a GAAP basis, operating expenses for the first quarter of 2008 were $34.6 million or 8.0% of total net revenues. Income from operations was $61.8 million for the first quarter of 2008, an increase of 116.7% year-over-year. Operating margin was 14.2%. Net income was $55.8 million, an increase of 113.8% year-over-year, or $0.33 per diluted ADS.
In the first quarter of 2008, capital expenditures, which were primarily related to production capacity expansion and the construction of Suntech's new production facilities, totaled $63.2 million and depreciation and amortization expenses totaled $7.7 million.
As of March 31, 2008, Suntech had cash and cash equivalents of $1.0 billion, compared to $521.0 million as of December 31, 2007. The increase was primarily due to the completion of a $575 million convertible notes offering in March 2008. Inventory totaled $178.3 million as of March 31,2008 compared to $176.2 million as of December 31, 2007.
Business Outlook
Based on current operating conditions, Suntech expects revenues for the second quarter of 2008 to be in the range of $430 million to $440 million. Suntech expects minimal revenue contribution from KSL-Kuttler in the second quarter of 2008. Non-GAAP consolidated gross margin in the second quarterof 2008 is expected to be relatively consistent with the first quarter of2008.
For the full year 2008, Suntech reiterates its expectation for total PV module shipments of 530MW and revenues in the range of $1.9 billion to $2.1 billion. Within 2008, Suntech believes that approximately 40% of this will be achieved in the first half of 2008 and 60% in the second half of 2008. Suntech expects that greater quantities of reasonably priced silicon will become increasingly available from mid-2008. Suntech targets to reach 1GW of installed PV cell production capacity by year-end 2008.
Senior Management Hires
Mr. Boxun Zhang has been promoted to Director of Business and Financial Analysis, reporting directly to Chief Financial Officer Ms. Amy Yi Zhang. Mr. Zhang joined in Suntech in February 2006 as Financial Controller. He previously worked for Credit Suisse and was an underwriter for Suntech's IPO in December 2005. Earlier, Mr. Zhang was a Senior Auditor and Senior Consultant with PricewaterhouseCoopers. Mr. Zhang received an MBA degree from Cass Business School in London, UK.
Mr. Andrew Wang joined Suntech to assume Mr. Zhang's former role as Corporate Financial Controller. Mr. Wang brings over 15 years of experiencein accounting and finance primarily with multinational companies operating in China. Key career experiences include increasing levels of managerial responsibility beginning at Deloitte Touche Tohmatsu Shanghai CPA, Avery Dennison Corporation, and most recently at OTIS China (Holding) Ltd. as leader of accounting, internal controls and Sarbanes-Oxley compliance. Mr.Wang holds an MBA from Washington University in St. Louis, Missouri, USA.
First Quarter 2008 Highlights(1)
-- First quarter 2008 total net revenues grew 76.1% year-over-year to $434.5 million.
-- Consolidated gross margin increased to 22.2% for the first quarter 2008 compared to 19.0% for the first quarter of 2007. Non-GAAP(2) gross margin reached 22.5 % for the first quarter 2008, compared with 19.9% for the first quarter 2007.
-- Net income for the first quarter 2008 was $55.8 million or $0.33 per diluted American Depository Share (ADS). On a non-GAAP basis, Suntech's net income for the first quarter 2008 was $60.6 million or $0.35 per diluted ADS. Each ADS represents one ordinary share.
-- Suntech's PV cell production capacity was 540MW at the end of the first quarter of 2008. The Company is on track to reach 1GW PV cell production capacity by the end of 2008.
"We executed extremely well during the first quarter, despite the impact of the snowstorm, to deliver stronger than expected growth in net revenues and solid financial results," said Dr. Zhengrong Shi, Suntech's Chairman and CEO. "A vigorous demand environment in the major solar markets in Germany and Spain as well as in the emerging markets including South Korea and Italy drove strong pricing during the quarter. We expect demand to remain robust through 2008 and are virtually sold out for the full year."
Commenting on Suntech's silicon outlook, Dr. Shi said, "During the first quarter we leveraged the funds raised through our convertible senior notes offering to enhance our long term cost competitiveness with new and expanded polysilicon supply agreements and strategic investment in key suppliers. Our ability to secure reasonably priced silicon reflects our competitive strengths with respect to our leading market position, financial strength, and close relationships with upstream suppliers. We are confident that this improved silicon outlook will help us to achieve ourgoal of providing grid parity solar solutions."
"During the first quarter, we continued to hire impressive talent incurrent and developing international markets including Germany, Spain, France, Greece, Italy, South Korea and Australia. This will lay the infrastructure for the continued rapid growth in our business, and provide the flexibility to respond to changing market dynamics. We are confident that our strategy of developing a broad portfolio of superior quality solar products, world-class manufacturing facilities and techniques, deep sales channels and improving cost efficiencies will differentiate Suntech as a clear leader in the solar industry," concluded Dr. Shi.
Recent Business Highlights
Products and Projects
-- Suntech established a 4MW module supply agreement with Enerray, an Italian designer, developer and manager of photovoltaic systems. The Suntech modules will be installed by Enerray in PV systems for the roof tops of large Italian industrial complexes.
-- Subsequent to the close of the quarter, Suntech signed an agreement with Hanau Energies SAS to supply a 4.5MW building integrated PV system (BIPV) to a farm located in Alsace, France. The project will be one of the largest BIPV installations ever built and will employ Suntech's 'Just Roof' modules to form complete weather proof roofs on five agricultural warehouses.
Global Offices and Acquisitions
-- Suntech Australia was opened in April 2008 to focus on sales and business development in Australia, New Zealand and the Pacific Islands.
-- Suntech recently closed an acquisition of KSL-Kuttler Automation Systems GmbH ("KSL-Kuttler"), a leading manufacturer of automation systems for the Printed Circuit Board (PCB) industry. KSL-Kuttler will design, develop and supply primarily automation equipment employed in Suntech's manufacturing process. KSL-Kuttler will continue to manufacture and supply equipment for the PCB industry.
Silicon Procurement and Investment
-- Suntech announced the second phase of a strategic cooperative agreement with Nitol Solar, an independent polysilicon producer. Suntech will acquire a minority interest in Nitol Solar for a total consideration of up to $100 million. In addition, in an amendment to the original 7-year silicon supply contract, Nitol Solar has agreed to substantially increase the aggregate committed volumes to be supplied between 2009 and 2015.
-- An eight-year polysilicon supply agreement was established with DC Chemical Co. Ltd. to supply Suntech polysilicon with a total value of approximately $631 million from 2009 to 2016.
-- Suntech strengthened its relationship with Hoku Scientific, Inc. through an investment of approximately $20 million in a private placement offering, which included an amendment to the existing supply agreement that accelerated the delivery time and increased volume to be delivered under the agreement.
Financing
-- On March 17, 2008, Suntech completed an offering of $575 million of 3.00% Convertible Senior Notes due 2013. In the first quarter of 2008, Suntech leveraged the funds to improve long-term silicon prospects with new and expanded polysilicon supply agreements with Nitol Solar, DC Chemical and Hoku Materials and strategic investments in Nitol Solar and Hoku. Suntech expects to continue utilizing these funds to secure long term supply of favorably priced silicon to support future development.
Industry Recognition
-- Suntech was named Frost & Sullivan's 2008 Solar Energy Development Company of the Year in recognition of unparalleled excellence in design and delivery of high-quality PV cells and modules and customization of energy solutions catering to a global client base.
First Quarter 2008 Results
Non-GAAP Non-GAAP
Net Revenues Gross Profit Gross
(in $ % of Net (in $ Margin
millions) Revenues millions) (%)
Standard PV Modules $432.9 99.6% $98.2 22.7%
- Wafer to Modules 414.7 95.4% 96.6 23.3%
- Cell to Modules 18.2 4.2% 1.6 8.5%
Others 1.6 0.4% (0.3) (16.6%)
Total Net Revenues $434.5 100% $97.9 22.5%
Total net revenues for the first quarter of 2008 were $434.5 million, representing an increase of 76.1% from the corresponding period in 2007.
Non-GAAP gross profit for the first quarter of 2008 was $97.9 million, an increase of 98.9% year-over-year. Non-GAAP gross margin for the Company's core wafer-to-module business was 23.3% and non-GAAP consolidated gross margin was 22.5%. The gross margin increased from the fourth quarter of 2007 primarily due to an increase in the average selling price driven by strong demand for Suntech's solar products, which was partly offset by increased silicon wafer costs.
Non-GAAP operating expenses in the first quarter of 2008 totaled $31.0 million or 7.1% of total net revenues. Operating expenses increased from the fourth quarter of 2007 primarily due to an increase in expenses associated with the expansion of Suntech's global sales network, marketing associated expenses, bank service charges due to increased financing costs and bank commission charges in China, and bad debt provision on certain long-aging receivables.
Non-GAAP income from operations for the first quarter of 2008 was $66.9 million, an increase of 86.5% year-over-year. Non-GAAP operating margin was 15.4%.
Net interest expense was $4.0 million in the first quarter of 2008 compared to net interest income of $1.1 million in the fourth quarter of 2007. The sequential increase in net interest expenses was primarily due to an increase in the short-term borrowing balance to facilitate daily operations, a decrease in interest income resulting from the reduction of the interest rate by the U.S. Federal Reserve Bank, and an increase in average borrowing costs due to the worsening global credit market.
Foreign currency exchange gain was $2.9 million in the first quarter of 2008 compared to a foreign currency exchange loss of $3.7 million in the fourth quarter of 2007. The foreign currency exchange gain in the first quarter of 2008 was primarily due to the appreciation of the Euro against the USD coupled with an increase in Euro-denominated sales.
Non-GAAP net income for the first quarter of 2008 was $60.6 million, an increase of 85.2% year-over-year, or $0.35 per non-GAAP diluted ADS.
On a GAAP basis, for the first quarter of 2008 gross profit was $96.4 million, an increase of 105.2% year-over-year. Gross margin for the core wafer to module business was 23.0% and consolidated gross margin was 22.2% for the first quarter of 2008.
On a GAAP basis, operating expenses for the first quarter of 2008 were $34.6 million or 8.0% of total net revenues. Income from operations was $61.8 million for the first quarter of 2008, an increase of 116.7% year-over-year. Operating margin was 14.2%. Net income was $55.8 million, an increase of 113.8% year-over-year, or $0.33 per diluted ADS.
In the first quarter of 2008, capital expenditures, which were primarily related to production capacity expansion and the construction of Suntech's new production facilities, totaled $63.2 million and depreciation and amortization expenses totaled $7.7 million.
As of March 31, 2008, Suntech had cash and cash equivalents of $1.0 billion, compared to $521.0 million as of December 31, 2007. The increase was primarily due to the completion of a $575 million convertible notes offering in March 2008. Inventory totaled $178.3 million as of March 31,2008 compared to $176.2 million as of December 31, 2007.
Business Outlook
Based on current operating conditions, Suntech expects revenues for the second quarter of 2008 to be in the range of $430 million to $440 million. Suntech expects minimal revenue contribution from KSL-Kuttler in the second quarter of 2008. Non-GAAP consolidated gross margin in the second quarterof 2008 is expected to be relatively consistent with the first quarter of2008.
For the full year 2008, Suntech reiterates its expectation for total PV module shipments of 530MW and revenues in the range of $1.9 billion to $2.1 billion. Within 2008, Suntech believes that approximately 40% of this will be achieved in the first half of 2008 and 60% in the second half of 2008. Suntech expects that greater quantities of reasonably priced silicon will become increasingly available from mid-2008. Suntech targets to reach 1GW of installed PV cell production capacity by year-end 2008.
Senior Management Hires
Mr. Boxun Zhang has been promoted to Director of Business and Financial Analysis, reporting directly to Chief Financial Officer Ms. Amy Yi Zhang. Mr. Zhang joined in Suntech in February 2006 as Financial Controller. He previously worked for Credit Suisse and was an underwriter for Suntech's IPO in December 2005. Earlier, Mr. Zhang was a Senior Auditor and Senior Consultant with PricewaterhouseCoopers. Mr. Zhang received an MBA degree from Cass Business School in London, UK.
Mr. Andrew Wang joined Suntech to assume Mr. Zhang's former role as Corporate Financial Controller. Mr. Wang brings over 15 years of experiencein accounting and finance primarily with multinational companies operating in China. Key career experiences include increasing levels of managerial responsibility beginning at Deloitte Touche Tohmatsu Shanghai CPA, Avery Dennison Corporation, and most recently at OTIS China (Holding) Ltd. as leader of accounting, internal controls and Sarbanes-Oxley compliance. Mr.Wang holds an MBA from Washington University in St. Louis, Missouri, USA.
Thursday, May 22, 2008
Earthquake victim committed suicide to give the survival opportunity to others
My dear friends,
http://solar-in-china.blogspot.com/ is my blog for China's solar energy industry, and I did not plan to talk about other issues here. But since the 8.0 magnitude earthquake hit Wenchuan China, all Chinese people have been following the rescue operation progress, and hundreds of thousand people went to join the rescue and disaster relief operation, the whole nation is moved by lots of heart-broken stories, and I would like to share such stories here with you.
Chinese governemnt agencies, companies, and individuals are donating to help the victims, but over ten million people are affected by the earthquake, the death toll is 41,353, and 274,683 people are injured, and 32, 666 people are missing by May 21st. Especially many children lost their parents, and many senior citizens lost their sons and daughters. These victims need our help, and I hope you may forward the earthquake information to your friends, and I hope you may pray for them, and help them in anyway if possible.
Now I would like to tell you a story about the earthquake.
The earthquake happened on May 12th, the rescuers came to Yingxiu, Wenchuan on May 15th, and found a old lady under the collapsed building. Yunfen Yang is 52 years old, and she is a retired doctor. 30 fireman and soldiers tried to save her with their bare hands, they did not have any tools, but it is hard for them to remove the collapsed things. At 9:40 am Yunfen Yang told the rescuers that "Please give up me, it is dangerous here, and go to rescue others." The rescue doctor told her that they would never give her up. Then Yunfen Yang took the broken glass with her right hand, and cut her left wrist first, then right wrist. The doctor tried to stop her, but Yunfen Yang is out of her touch. When the doctor shouted "No, and please do not" and cried, Yunfen Yang swallowed her gold ring also to end her life and to give the survival opportunity to others.
http://solar-in-china.blogspot.com/ is my blog for China's solar energy industry, and I did not plan to talk about other issues here. But since the 8.0 magnitude earthquake hit Wenchuan China, all Chinese people have been following the rescue operation progress, and hundreds of thousand people went to join the rescue and disaster relief operation, the whole nation is moved by lots of heart-broken stories, and I would like to share such stories here with you.
Chinese governemnt agencies, companies, and individuals are donating to help the victims, but over ten million people are affected by the earthquake, the death toll is 41,353, and 274,683 people are injured, and 32, 666 people are missing by May 21st. Especially many children lost their parents, and many senior citizens lost their sons and daughters. These victims need our help, and I hope you may forward the earthquake information to your friends, and I hope you may pray for them, and help them in anyway if possible.
Now I would like to tell you a story about the earthquake.
The earthquake happened on May 12th, the rescuers came to Yingxiu, Wenchuan on May 15th, and found a old lady under the collapsed building. Yunfen Yang is 52 years old, and she is a retired doctor. 30 fireman and soldiers tried to save her with their bare hands, they did not have any tools, but it is hard for them to remove the collapsed things. At 9:40 am Yunfen Yang told the rescuers that "Please give up me, it is dangerous here, and go to rescue others." The rescue doctor told her that they would never give her up. Then Yunfen Yang took the broken glass with her right hand, and cut her left wrist first, then right wrist. The doctor tried to stop her, but Yunfen Yang is out of her touch. When the doctor shouted "No, and please do not" and cried, Yunfen Yang swallowed her gold ring also to end her life and to give the survival opportunity to others.
Polysilicon projects in Sichuan unaffected by earthquake
Shanghai. May 14. INTERFAX-CHINA - Polysilicon projects in Sichuan Province were unaffected by the 8.0 magnitude earthquake that rocked the province on May 12, according to local companies. Several polysilicon projects are either under operation or construction in Sichuan. Polysilicon is the raw material for photovoltaic (PV) products.
An official with Emei Semiconductor Material Factory, located in Sichuan's central city of Emeishan, told Interfax today that its polysilicon production was not affected by the quake. The official, who wished to remain anonymous, said the earthquake's only impact on the company has been transportation delays.
Emeishan City is about 196 kilometers away from Wenchuan County, which was the site of the epicenter of the earthquake.
Emei Semiconductor Material Factory has a polysilicon production line with an annual production capacity of 200 tons, and is China's first 200-ton polysilicon production line.
The official said that the company's other project under construction, located in the city of Leshan and which is close to Emeishan City, was not affected by the earthquake either.
The Leshan project has received investment from Dongfang Electric Corp.(DEC), and has an annual polysilicon production capacity of 1,500 tons. The project is expected to be completed by the end of this year.
An official with Sichuan-based Tongwei Group told Interfax that its1,000-ton polysilicon project, which is being constructed in Leshan City, was also unaffected. This project is expected to be completed in June.
Shanghai-listed Tianwei Baobian Electric Co. Ltd. (TWBB) announced today that Sichuan Xinguang Silicon Science and Technology Co. Ltd., a company in which it the second largest shareholder, was also unaffected by the earthquake.
Sichuan Xinguang Silicon Science and Technology suspended operations for the sake of safety in the wake of the quake, but will resume production as soon as possible.
In addition, TWBB said that the construction of two other polysilicon projects in Leshan City and Xinjin County, each with an annual production capacity of 3,000 tons, were not affected by the quake.
An official with Emei Semiconductor Material Factory, located in Sichuan's central city of Emeishan, told Interfax today that its polysilicon production was not affected by the quake. The official, who wished to remain anonymous, said the earthquake's only impact on the company has been transportation delays.
Emeishan City is about 196 kilometers away from Wenchuan County, which was the site of the epicenter of the earthquake.
Emei Semiconductor Material Factory has a polysilicon production line with an annual production capacity of 200 tons, and is China's first 200-ton polysilicon production line.
The official said that the company's other project under construction, located in the city of Leshan and which is close to Emeishan City, was not affected by the earthquake either.
The Leshan project has received investment from Dongfang Electric Corp.(DEC), and has an annual polysilicon production capacity of 1,500 tons. The project is expected to be completed by the end of this year.
An official with Sichuan-based Tongwei Group told Interfax that its1,000-ton polysilicon project, which is being constructed in Leshan City, was also unaffected. This project is expected to be completed in June.
Shanghai-listed Tianwei Baobian Electric Co. Ltd. (TWBB) announced today that Sichuan Xinguang Silicon Science and Technology Co. Ltd., a company in which it the second largest shareholder, was also unaffected by the earthquake.
Sichuan Xinguang Silicon Science and Technology suspended operations for the sake of safety in the wake of the quake, but will resume production as soon as possible.
In addition, TWBB said that the construction of two other polysilicon projects in Leshan City and Xinjin County, each with an annual production capacity of 3,000 tons, were not affected by the quake.
Wednesday, May 21, 2008
China Sunergy Announces Financial Results for the First Quarter 2008
First Quarter Revenues of US$77.0 Million, up 7.8% from the Previous Quarter; Shipments Amounting to 24.0MW; Net Income US$0.5 million; Net Operating Cash Inflow of US$60.7 million
NANJING, China, May 20 /Xinhua-PRNewswire/ -- China Sunergy Co., Ltd.(Nasdaq: CSUN), ("China Sunergy" or the "Company") a specialized solar cell manufacturer based in Nanjing, China, announced today its financial results for the first quarter of 2008.
First Quarter Financial Results
-- Revenues were US$77.0 million, representing 32.3% and 7.8% increase compared to the first quarter and the fourth quarter of 2007, respectively; revenues generated from solar cell sales were US$75.0 million, representing 49.5% and 10.8% increase compared to the first quarter and the fourth quarter of 2007, respectively.
-- Gross profit was US$7.1 million compared to US$9.6 million and US$4.6 million during the first quarter and the fourth quarter of 2007, respectively. Gross margin was 9.2%, compared to 16.6% and 6.4% during the first quarter and the fourth quarter of 2007, respectively.
-- Quarterly net income was US$0.5 million, compared to net income of US$5.4 million and a net loss of US$2.3 million in the first quarter and fourth quarter of 2007, respectively.
-- Basic and diluted net earnings attributable to holders of ordinary shares were US$0.01 per ADS compared to a net income of US$0.17 and a net loss of US$0.06 per ADS in the first quarter and the fourth quarter 2007, respectively.
Commenting on the quarter, Allen Wang, CEO of China Sunergy remarked:"Despite the three-week interruption to our operations caused by the snowstorms in January, and the higher wafer costs during the quarter, wemanaged to turn around and get back to profitability in the first quarter.Our improved financial performance was largely a result of the higher ASP achieved by successfully ramping our high efficiency cell production levels, and the steady improvements made to our internal operations. In particular, I am delighted to report that the working capital management and control measures we began putting in place at the end of last year have improved our cashflow and liquidity position."
First Quarter and Recent Operational Highlights
-- Quarterly production of 22.6 megawatts ("MW") of solar cells represented a 13.0% increase on a year-over-year basis and a 1.3% increase sequentially. The relatively small increase over the fourth quarter of 2007 was due to the impact of the heavy snow storm in January 2008.
-- Shipments of our solar power products amounted to approximately 24.0 MW, representing a 31.1% increase on a year-over-year basis and a 3.4% increase sequentially.
-- Shipments of high efficiency cells during the first quarter of 2008 amounted to 9.1 MW, or 39% of total core cell shipments, up from 0.8 MW, or 3.6% of total core cell shipments, during the fourth quarter of 2007.
-- Average selective emitter cell conversion efficiency slightly decreased to 17.2% from 17.3% in the fourth quarter 2007.
-- Conversion of P-type lines to high efficiency ("HP") lines continued to progress smoothly. We have already completed the conversion of two mono-crystalline P-type lines and cells produced on these HP lines achieved an average conversion efficiency rate of over 16.8% during the first quarter of 2008.
-- Stricter working capital management and controls yielded a net operating cash inflow of US$60.7 million; the controls included more restrictive policies on pre-payments to suppliers, and tighter payment terms for receivables and payables, as well as better inventory management.
"I am increasingly optimistic about our long-term future, particularlygiven the success we are achieving with our high efficiency cells and thepositive impact they are having on our margins this year." Continued Dr.Wang, "I believe we are now in a better position to manage ourprofitability along with the various development programs we have for highefficiency cells."
Technological Developments
During the quarter the Company continued to make progress with theproduction of its high-efficiency cell technology.
Average selective emitter cell conversion efficiency decreased to 17.2%from 17.3% in the fourth quarter of 2007 due to the interruption toproduction caused by the snow storm in January 2008. A maximum conversionefficiency of 18.5% was recorded during the quarter.
The Company is continuing to upgrade its current P-type cell productionfacilities by converting existing mono-crystalline P-type lines to HP linesand will complete the conversion of its remaining two mono-crystallineP-type lines to HP-type lines by the end of the second quarter.
The Board has approved the establishment of a R&D center in Shanghaiwith an initial investment of US$8.0 million. The R&D center will focus onthe development of new high efficiency cell types, particularly N-typecells. The construction of the R&D center is scheduled to be completedduring the first half of 2009.
First Quarter 2008 Financial and Business Review
Revenues, shipment and production
During the first quarter of 2008, revenues increased 32.3% on ayear-over- year basis, and 7.8% sequentially to US$77.0 million.
Sales from solar cells, modules and processed cells under OEMarrangements and other sales accounted for 97.4%, 2.1%, 0.3% and 0.2%, oftotal revenues, respectively. Shipments, including 0.4 MW for module salesand 0.4 MW of solar cells processed under OEM arrangements, amounted toapproximately 24.0 MW, compared to 18.3 MW during the first quarter of 2007and 23.2 MW during the fourth quarter of 2007.
Revenues and Shipment Comparison between Q1 2008 and Q4 2007
Q1 2008 Q4 2007
Value Value
Volume* (US$mm) Volume* (US$mm)
Solar cell sales 23.2 75.0 22.4 67.7
Polysilicon sales -- -- 0.8 0.7
Module sales 0.4 1.6 0.8 3.1 OEM 0.4 0.2 -- --
Other sales 0.2 -- --
* All volumes are expressed in MW except for polysilicon sales which are expressed in metric tons.
During the first quarter of 2008, the Company increased its quarter-on-quarter sales of solar cell products by 10.8% as compared to the previousquarter. The percentage of solar cell sales in overseas markets as to thetotal solar cell sales was 37.4% in the first quarter of 2008 compared to24.1% and 40.6% in the first quarter and the fourth quarter of 2007,respectively.
Of the 23.2 MW of core cells shipped during the first quarter, 9.1 MWwere in the form of high efficiency cells (which we define as cells with aconversion efficiency rate of 17% and above) and 14.1 MW in the form ofnormal P-type cells. Of the 9.1 MW of high efficiency cells shipped, 4.0 MWwere selective emitter cells and 5.1 MW were HP cells (which we define asP-type cells with conversion efficiency rate of 17% and over).
Gross profit, gross margins and average selling price ("ASP")
Gross profit for the quarter was US$7.1 million, which led to a blendedgross margin of 9.2%, up from 6.4% in the previous quarter, as a result of thegross margin contribution from higher ASP resulting from the shipment of agreater volume of high efficiency cell products. The sequential increase ingross margin on solar cell sales from 6.3% to 8.8% was mainly attributable tohigher ASP as a result of increased shipment of high efficiency cells andstronger product demand from customers. However, our gross margin decreasedby 7.4% compared to the first quarter of 2007, mainly due to higher wafercosts.
Margin Breakdown
Gross margin
Q1 2008 Q4 2007
Solar cell sales 8.8 % 6.3 %
Polysilicon Sales -- 12.2 %
Module sales 11.7 % 7.8 %
OEM 65.1 % --
Other sales 90.3 % --
Blended 9.2 % 6.4 %
Blended ASP for the first quarter of 2008 rose from US$3.02 per watt inthe previous quarter to US$3.23 per watt due to a greater portion of highefficiency cells, strong product demand and the strengthening of theRenminbi against U.S. dollar. The blended ASP for the first quarter of 2007was US$2.95.
Wafer costs
Wafer costs continued to account for a large portion of our overallmanufacturing costs. In the first quarter of 2008, wafer costs rose toUS$2.64 per watt compared to US$2.23 and US$2.54 per watt in the firstquarter, and the fourth quarter of 2007, mainly due to the strengthening ofthe Renminbi against the U.S. dollar and an increase in the average costper wafer in Renminbi terms. Wafer costs per watt as a percentage of totalproduction costs per watt increased from 87.8% in the first quarter of 2007and 90.1% in the fourth quarter 2007 to 90.3% in the first quarter 2008.Other production costs, which mainly consisted of other raw materials,labor, depreciation and utilities, were US$0.28 per watt and largely thesame as those in the first quarter and the fourth quarter of 2007.
SG&A, operating profit and net income
Our SG&A expenses in the first quarter of 2008 were US$4.4 million,compared to US$2.8 million period-over-period and US$5.3 millionsequentially. The share based compensation charges were US$0.7 million,compared to US$0.1 million in the first quarter and the fourth quarter of2007.
Due primarily to higher gross margin, the Company made an operatingprofit of US$2.2 million. This compares to an operating profit of US$6.5million and an operating loss of US$1.2 million for the first and fourthquarters of 2007, respectively.
With a higher gross margin, the Company improved its net income toUS$0.5 million in the first quarter of 2008 compared to a net loss ofUS$2.3 million in the previous quarter. However, our net income decreasedby US$4.9 million period-over-period, mainly due to higher raw materialcosts and operating expenses.
Balance sheet and cash flow
As of March 31, 2008, the Company had cash and cash equivalents of US$110.4 million. Net operating cash in flow for the first quarter was US$60.7 million, mainly attributable to stricter control over prepayments to raw material suppliers, better management of both receivables and payables, and stricter enforcement of payment terms as well as better inventory management. In the first quarter of 2008, depreciation was US$1.3 million and capital expenditures were US$12.7 million. The capital expenditures were related to prepayments made for equipment relating to the expansion of our selective emitter cell lines.
Commenting on the financial results, Kenneth Luk, CFO of China Sunergy, said: "We continue to look for cost effective ways to strengthen our balance sheet and improve liquidity. Going forward, we will continue to do whatever we can to strengthen our cashflow, so that we can be in a better position to expand our production capacity, fund R&D, secure long-term supply contracts and pay down bank loans."
Outlook
Given the success of our first quarter production of HP cells, the company will convert the two remaining mono-crystalline P-type lines to HP lines. With the exception of one multi-crystalline P-type line, this conversion is expected to be completed by the end of the first half of2008. In addition, all four of our new selective emitter lines are expected to be in mass production during the fourth quarter of 2008. This will bring our total capacity to 320 MW by the end of the year based on six-inch wafers.
The Company maintains its full year 2008 production target at 125-145MW, with approximately 65 to 85 MW expected to come from high efficiency cell products. These high efficiency cell products are projected to comprise of approximately 25-35 MW of selective emitter cells and 40-50 MW of HP cells.
The Company anticipates its gross margin for the second quarter to be between 9% and 10%, and production volume in the range of 30-32 MW.
Recent Management Updates
During the quarter, China Sunergy announced the appointment of three new independent directors. Mr. Steven Morgan, 57, Mr. Wang Wenze, 66, and Ms. Jian Li, 55, joined the Company's board of directors on May 13th, 2008. Each brings with them approximately 25 years of experience and unique strengths in advisory roles.
Additionally, as of June 30th, 2008, Mr. Alan Smith, an independent director on the board of directors, will be stepping down from his role.
NANJING, China, May 20 /Xinhua-PRNewswire/ -- China Sunergy Co., Ltd.(Nasdaq: CSUN), ("China Sunergy" or the "Company") a specialized solar cell manufacturer based in Nanjing, China, announced today its financial results for the first quarter of 2008.
First Quarter Financial Results
-- Revenues were US$77.0 million, representing 32.3% and 7.8% increase compared to the first quarter and the fourth quarter of 2007, respectively; revenues generated from solar cell sales were US$75.0 million, representing 49.5% and 10.8% increase compared to the first quarter and the fourth quarter of 2007, respectively.
-- Gross profit was US$7.1 million compared to US$9.6 million and US$4.6 million during the first quarter and the fourth quarter of 2007, respectively. Gross margin was 9.2%, compared to 16.6% and 6.4% during the first quarter and the fourth quarter of 2007, respectively.
-- Quarterly net income was US$0.5 million, compared to net income of US$5.4 million and a net loss of US$2.3 million in the first quarter and fourth quarter of 2007, respectively.
-- Basic and diluted net earnings attributable to holders of ordinary shares were US$0.01 per ADS compared to a net income of US$0.17 and a net loss of US$0.06 per ADS in the first quarter and the fourth quarter 2007, respectively.
Commenting on the quarter, Allen Wang, CEO of China Sunergy remarked:"Despite the three-week interruption to our operations caused by the snowstorms in January, and the higher wafer costs during the quarter, wemanaged to turn around and get back to profitability in the first quarter.Our improved financial performance was largely a result of the higher ASP achieved by successfully ramping our high efficiency cell production levels, and the steady improvements made to our internal operations. In particular, I am delighted to report that the working capital management and control measures we began putting in place at the end of last year have improved our cashflow and liquidity position."
First Quarter and Recent Operational Highlights
-- Quarterly production of 22.6 megawatts ("MW") of solar cells represented a 13.0% increase on a year-over-year basis and a 1.3% increase sequentially. The relatively small increase over the fourth quarter of 2007 was due to the impact of the heavy snow storm in January 2008.
-- Shipments of our solar power products amounted to approximately 24.0 MW, representing a 31.1% increase on a year-over-year basis and a 3.4% increase sequentially.
-- Shipments of high efficiency cells during the first quarter of 2008 amounted to 9.1 MW, or 39% of total core cell shipments, up from 0.8 MW, or 3.6% of total core cell shipments, during the fourth quarter of 2007.
-- Average selective emitter cell conversion efficiency slightly decreased to 17.2% from 17.3% in the fourth quarter 2007.
-- Conversion of P-type lines to high efficiency ("HP") lines continued to progress smoothly. We have already completed the conversion of two mono-crystalline P-type lines and cells produced on these HP lines achieved an average conversion efficiency rate of over 16.8% during the first quarter of 2008.
-- Stricter working capital management and controls yielded a net operating cash inflow of US$60.7 million; the controls included more restrictive policies on pre-payments to suppliers, and tighter payment terms for receivables and payables, as well as better inventory management.
"I am increasingly optimistic about our long-term future, particularlygiven the success we are achieving with our high efficiency cells and thepositive impact they are having on our margins this year." Continued Dr.Wang, "I believe we are now in a better position to manage ourprofitability along with the various development programs we have for highefficiency cells."
Technological Developments
During the quarter the Company continued to make progress with theproduction of its high-efficiency cell technology.
Average selective emitter cell conversion efficiency decreased to 17.2%from 17.3% in the fourth quarter of 2007 due to the interruption toproduction caused by the snow storm in January 2008. A maximum conversionefficiency of 18.5% was recorded during the quarter.
The Company is continuing to upgrade its current P-type cell productionfacilities by converting existing mono-crystalline P-type lines to HP linesand will complete the conversion of its remaining two mono-crystallineP-type lines to HP-type lines by the end of the second quarter.
The Board has approved the establishment of a R&D center in Shanghaiwith an initial investment of US$8.0 million. The R&D center will focus onthe development of new high efficiency cell types, particularly N-typecells. The construction of the R&D center is scheduled to be completedduring the first half of 2009.
First Quarter 2008 Financial and Business Review
Revenues, shipment and production
During the first quarter of 2008, revenues increased 32.3% on ayear-over- year basis, and 7.8% sequentially to US$77.0 million.
Sales from solar cells, modules and processed cells under OEMarrangements and other sales accounted for 97.4%, 2.1%, 0.3% and 0.2%, oftotal revenues, respectively. Shipments, including 0.4 MW for module salesand 0.4 MW of solar cells processed under OEM arrangements, amounted toapproximately 24.0 MW, compared to 18.3 MW during the first quarter of 2007and 23.2 MW during the fourth quarter of 2007.
Revenues and Shipment Comparison between Q1 2008 and Q4 2007
Q1 2008 Q4 2007
Value Value
Volume* (US$mm) Volume* (US$mm)
Solar cell sales 23.2 75.0 22.4 67.7
Polysilicon sales -- -- 0.8 0.7
Module sales 0.4 1.6 0.8 3.1 OEM 0.4 0.2 -- --
Other sales 0.2 -- --
* All volumes are expressed in MW except for polysilicon sales which are expressed in metric tons.
During the first quarter of 2008, the Company increased its quarter-on-quarter sales of solar cell products by 10.8% as compared to the previousquarter. The percentage of solar cell sales in overseas markets as to thetotal solar cell sales was 37.4% in the first quarter of 2008 compared to24.1% and 40.6% in the first quarter and the fourth quarter of 2007,respectively.
Of the 23.2 MW of core cells shipped during the first quarter, 9.1 MWwere in the form of high efficiency cells (which we define as cells with aconversion efficiency rate of 17% and above) and 14.1 MW in the form ofnormal P-type cells. Of the 9.1 MW of high efficiency cells shipped, 4.0 MWwere selective emitter cells and 5.1 MW were HP cells (which we define asP-type cells with conversion efficiency rate of 17% and over).
Gross profit, gross margins and average selling price ("ASP")
Gross profit for the quarter was US$7.1 million, which led to a blendedgross margin of 9.2%, up from 6.4% in the previous quarter, as a result of thegross margin contribution from higher ASP resulting from the shipment of agreater volume of high efficiency cell products. The sequential increase ingross margin on solar cell sales from 6.3% to 8.8% was mainly attributable tohigher ASP as a result of increased shipment of high efficiency cells andstronger product demand from customers. However, our gross margin decreasedby 7.4% compared to the first quarter of 2007, mainly due to higher wafercosts.
Margin Breakdown
Gross margin
Q1 2008 Q4 2007
Solar cell sales 8.8 % 6.3 %
Polysilicon Sales -- 12.2 %
Module sales 11.7 % 7.8 %
OEM 65.1 % --
Other sales 90.3 % --
Blended 9.2 % 6.4 %
Blended ASP for the first quarter of 2008 rose from US$3.02 per watt inthe previous quarter to US$3.23 per watt due to a greater portion of highefficiency cells, strong product demand and the strengthening of theRenminbi against U.S. dollar. The blended ASP for the first quarter of 2007was US$2.95.
Wafer costs
Wafer costs continued to account for a large portion of our overallmanufacturing costs. In the first quarter of 2008, wafer costs rose toUS$2.64 per watt compared to US$2.23 and US$2.54 per watt in the firstquarter, and the fourth quarter of 2007, mainly due to the strengthening ofthe Renminbi against the U.S. dollar and an increase in the average costper wafer in Renminbi terms. Wafer costs per watt as a percentage of totalproduction costs per watt increased from 87.8% in the first quarter of 2007and 90.1% in the fourth quarter 2007 to 90.3% in the first quarter 2008.Other production costs, which mainly consisted of other raw materials,labor, depreciation and utilities, were US$0.28 per watt and largely thesame as those in the first quarter and the fourth quarter of 2007.
SG&A, operating profit and net income
Our SG&A expenses in the first quarter of 2008 were US$4.4 million,compared to US$2.8 million period-over-period and US$5.3 millionsequentially. The share based compensation charges were US$0.7 million,compared to US$0.1 million in the first quarter and the fourth quarter of2007.
Due primarily to higher gross margin, the Company made an operatingprofit of US$2.2 million. This compares to an operating profit of US$6.5million and an operating loss of US$1.2 million for the first and fourthquarters of 2007, respectively.
With a higher gross margin, the Company improved its net income toUS$0.5 million in the first quarter of 2008 compared to a net loss ofUS$2.3 million in the previous quarter. However, our net income decreasedby US$4.9 million period-over-period, mainly due to higher raw materialcosts and operating expenses.
Balance sheet and cash flow
As of March 31, 2008, the Company had cash and cash equivalents of US$110.4 million. Net operating cash in flow for the first quarter was US$60.7 million, mainly attributable to stricter control over prepayments to raw material suppliers, better management of both receivables and payables, and stricter enforcement of payment terms as well as better inventory management. In the first quarter of 2008, depreciation was US$1.3 million and capital expenditures were US$12.7 million. The capital expenditures were related to prepayments made for equipment relating to the expansion of our selective emitter cell lines.
Commenting on the financial results, Kenneth Luk, CFO of China Sunergy, said: "We continue to look for cost effective ways to strengthen our balance sheet and improve liquidity. Going forward, we will continue to do whatever we can to strengthen our cashflow, so that we can be in a better position to expand our production capacity, fund R&D, secure long-term supply contracts and pay down bank loans."
Outlook
Given the success of our first quarter production of HP cells, the company will convert the two remaining mono-crystalline P-type lines to HP lines. With the exception of one multi-crystalline P-type line, this conversion is expected to be completed by the end of the first half of2008. In addition, all four of our new selective emitter lines are expected to be in mass production during the fourth quarter of 2008. This will bring our total capacity to 320 MW by the end of the year based on six-inch wafers.
The Company maintains its full year 2008 production target at 125-145MW, with approximately 65 to 85 MW expected to come from high efficiency cell products. These high efficiency cell products are projected to comprise of approximately 25-35 MW of selective emitter cells and 40-50 MW of HP cells.
The Company anticipates its gross margin for the second quarter to be between 9% and 10%, and production volume in the range of 30-32 MW.
Recent Management Updates
During the quarter, China Sunergy announced the appointment of three new independent directors. Mr. Steven Morgan, 57, Mr. Wang Wenze, 66, and Ms. Jian Li, 55, joined the Company's board of directors on May 13th, 2008. Each brings with them approximately 25 years of experience and unique strengths in advisory roles.
Additionally, as of June 30th, 2008, Mr. Alan Smith, an independent director on the board of directors, will be stepping down from his role.
ET Solar Group Announces Establishment of Korean Subsidiary in Seoul, Korea
NANJING, China, May 19 /Xinhua-PRNewswire/ -- ET Solar Group Corp. ("ETSolar"), a Nanjing-based vertically integrated manufacturer of photovoltaic products including ingots, wafers, modules, and state-of-the-art dual-axis tracking systems with manufacturing facilities located in Taizhou, China, announced today that it has established a wholly owned subsidiary in Seoul, Korea.
Following the establishment of an Italian office in Rome this March, ET Solar now opens a subsidiary in Seoul to handle sales and procurement efforts in Korea.
"We see Korea as the second largest PV market in the near future in Asia ex-Japan, and the establishment of our presence will further strengthen our global brand name and enable us to better understand and address the fast increasing demand of PV equipment and turn key solutions in this market," commented Dennis She, Chief Sales Officer of ET Solar. "In particular, Korea is an ideal market for dual-axis tracking systems and ET Solar is one of the very few companies that is offering both modules and state-of-the-art tracking systems to our customers in the region."
Following the establishment of an Italian office in Rome this March, ET Solar now opens a subsidiary in Seoul to handle sales and procurement efforts in Korea.
"We see Korea as the second largest PV market in the near future in Asia ex-Japan, and the establishment of our presence will further strengthen our global brand name and enable us to better understand and address the fast increasing demand of PV equipment and turn key solutions in this market," commented Dennis She, Chief Sales Officer of ET Solar. "In particular, Korea is an ideal market for dual-axis tracking systems and ET Solar is one of the very few companies that is offering both modules and state-of-the-art tracking systems to our customers in the region."
Earthquake killed mother nurses her baby
My dear friends,
http://solar-in-china.blogspot.com/ is my blog for China's solar energy industry, and I did not plan to talk about other issues here. But since the 8.0 magnitude earthquake hit Wenchuan China, all Chinese people have been following the rescue operation progress, and hundreds of thousand people went to join the rescue and disaster relief operation, the whole nation is moved by lots of heart-broken stories, and I would like to share such stories here with you. Please see my future articles.
Chinese governemnt agencies, companies, and individuals are donating to help the victims, but over ten million people are affected by the earthquake, the death toll will be over fifty thousand, and over two hundred and seventy five thousand people are injured, especially many children lost their parents, and many senior citizens lost their sons and daughters. These victims need our help, and I hope you may forward the earthquake information to your friends, and I hope you may pray for them, and help them if possible.
In the afternoon of May 13th, one day later after the earthquake, the rescuers found one young mother and her three month old baby in the a collapsed house, and the baby was sucking the nipple. The fireman gave his hand to the mother, but no response. Then the fireman took the baby away, and found the mother was dead already. We can imagine that the mother in order to save her baby, put her nipple in her baby's mouth before she died. And the baby's father died in the house also. When the fireman took the baby away from the nipple, the baby began to cry at once, and she was not aware of the disaster.
http://solar-in-china.blogspot.com/ is my blog for China's solar energy industry, and I did not plan to talk about other issues here. But since the 8.0 magnitude earthquake hit Wenchuan China, all Chinese people have been following the rescue operation progress, and hundreds of thousand people went to join the rescue and disaster relief operation, the whole nation is moved by lots of heart-broken stories, and I would like to share such stories here with you. Please see my future articles.
Chinese governemnt agencies, companies, and individuals are donating to help the victims, but over ten million people are affected by the earthquake, the death toll will be over fifty thousand, and over two hundred and seventy five thousand people are injured, especially many children lost their parents, and many senior citizens lost their sons and daughters. These victims need our help, and I hope you may forward the earthquake information to your friends, and I hope you may pray for them, and help them if possible.
In the afternoon of May 13th, one day later after the earthquake, the rescuers found one young mother and her three month old baby in the a collapsed house, and the baby was sucking the nipple. The fireman gave his hand to the mother, but no response. Then the fireman took the baby away, and found the mother was dead already. We can imagine that the mother in order to save her baby, put her nipple in her baby's mouth before she died. And the baby's father died in the house also. When the fireman took the baby away from the nipple, the baby began to cry at once, and she was not aware of the disaster.
Tuesday, May 20, 2008
Tanqianqiu saved 4 students with his life
My dear friends,
http://solar-in-china.blogspot.com/ is my blog for China's solar energy industry, and I did not plan to talk about other issues here. But since the 8.0 magnitude earthquake hit Wenchuan China, all Chinese people have been following the rescue operation progress, and hundreds of thousand people went to join the rescue and disaster relief operation, the whole nation is moved by lots of heart-broken stories, and I would like to share such stories here with you. Please see my future articles.
Chinese governemnt agencies, companies, and individuals are donating to help the victims, but over ten million people are affected by the earthquake, the death toll will be over fifty thousand, and about two hundred and fifty thousand people are injured, especially many children lost their parents, and many senior citizens lost their sons and daughters. These victims need our help, and I hope you may forward the earthquake information to your friends, and I hope you may pray for them, and help them if possible.
Magnitude 8.0 earthquake hit Wenchuan China on May 12th 2008, and in the evening of May 13th rescuer rescued 4 buried students from the debris of Deyang Dongqi Middle School.
And these 4 students were saved by their teacher, Mr.Tan Qianqiu. When the earthquake took place, Mr. Tan was giving his student a lesson. When the classroom shaked dramatically, Mr.Tan realized the earthquake happened, and he asked his students to get out of the classroom at once, and not take anything with them. But four students did not have the time to leave the classroom, then he let them hide under one desk, and he made his back bent, put his two hands on the desk with force and cover the four students with his body. The brick and floor slab hit his head and body when the classroom building collapsed, and his four students were saved.
http://solar-in-china.blogspot.com/ is my blog for China's solar energy industry, and I did not plan to talk about other issues here. But since the 8.0 magnitude earthquake hit Wenchuan China, all Chinese people have been following the rescue operation progress, and hundreds of thousand people went to join the rescue and disaster relief operation, the whole nation is moved by lots of heart-broken stories, and I would like to share such stories here with you. Please see my future articles.
Chinese governemnt agencies, companies, and individuals are donating to help the victims, but over ten million people are affected by the earthquake, the death toll will be over fifty thousand, and about two hundred and fifty thousand people are injured, especially many children lost their parents, and many senior citizens lost their sons and daughters. These victims need our help, and I hope you may forward the earthquake information to your friends, and I hope you may pray for them, and help them if possible.
Magnitude 8.0 earthquake hit Wenchuan China on May 12th 2008, and in the evening of May 13th rescuer rescued 4 buried students from the debris of Deyang Dongqi Middle School.
And these 4 students were saved by their teacher, Mr.Tan Qianqiu. When the earthquake took place, Mr. Tan was giving his student a lesson. When the classroom shaked dramatically, Mr.Tan realized the earthquake happened, and he asked his students to get out of the classroom at once, and not take anything with them. But four students did not have the time to leave the classroom, then he let them hide under one desk, and he made his back bent, put his two hands on the desk with force and cover the four students with his body. The brick and floor slab hit his head and body when the classroom building collapsed, and his four students were saved.
Mr.Tan's wife is cleaning his body.
Monday, May 19, 2008
China begins three-day mourning for quake victims
My dear friends,
http://solar-in-china.blogspot.com/ is my blog for China's solar energy industry, and I did not plan to talk about other issues here. But since the 8.0 magnitude earthquake hit Wenchuan China, all Chinese people have been following the rescue operation progress, and hundreds of thousand people went to join the rescue and disaster relief operation, the whole nation is moved by lots of heart-broken stories, and I would like to share such stories here with you. Please see my future articles.
Chinese governemnt agencies, companies, and individuals are donating to help the victims, but over ten million people are affected by the earthquake, the death toll will be over fifty thousand, and about two hundred and fifty thousand people are injured, especially many children lost their parents, and many senior citizens lost their sons and daughters. These victims need our help, and I hope you may forward the earthquake information to your friends, and I hope you may pray for them, and help them if possible.
China's national flag flies at half-mast after the flag-raising ceremony on Tian'anmen Square in Beijing Monday morning, May 19, 2008. China on Monday begins a three-day national mourning for the tens of thousands of people killed in a powerful earthquake which struck the country's southwest on May 12.
At 4:58 a.m., the national flag at the Tian'anmen Square in downtown Beijing flew at half-mast after a complete flag-raising ceremony.
About 2,600 people watched the flag-raising ceremony in the square.
All national flags will fly at half-mast at home and Chinese diplomatic missions abroad from Monday to Wednesday. Public recreational activities will be halted during the mourning period.
At 2:28 p.m. Monday, Chinese citizens nationwide will stand in silence for three minutes to mourn for the victims, while air raid sirens and horns of automobiles, trains and ships will wail in grief.
In the mourning period, condolence books will be opened in China's Foreign Ministry and Chinese embassies and consulates around the world.
The Beijing Olympic torch relay will also be suspended from Monday to Wednesday.
The death toll in China's devastating earthquake rose to 34,073 as of 12:00 a.m. Monday, according to the earthquake relief headquarters of the State Council.
And 245,108 others were injured in the 8.0-magnitude quake that jolted southwestern Sichuan Province last Monday.
According to the Ministry of Health, about 52,934 people have been hospitalized and 7,979 have recovered while 3,304 died in hospital.
The quake hit Wenchuan County, Sichuan Province, at 2:28 p.m. of May 12. Many other areas were also affected.
The search, rescue and disaster relief efforts are continuing. Some 113,080 Chinese soldiers and armed police have been mobilized to help with rescue operations. Rescue teams from Russia, the Republic of Korea, Japan and Singapore, as well as Taiwan and Hong Kong regions, have also joined in relief efforts.
Thursday, May 15, 2008
Trina Solar Signs Long-Term Polysilicon Supply Agreement with DTK Industries (Qingdao) Co., Ltd.
CHANGZHOU, China, May 15 /Xinhua-PRNewswire-FirstCall/ -- Trina Solar Limited (NYSE: TSL; '"Trina Solar" or the "Company"), a leading integrated manufacturer of solar photovoltaic products from the production of ingots,wafers and cells to the assembly of PV modules, founded in 1997, today announced that the Company has signed a long-term polysilicon supply agreement with Jupiter Corporation Ltd., an affiliate of DTK Industries(Qingdao) Co., Ltd. (collectively, "Qingdao DTK").
Under this agreement, Qingdao DTK will supply Trina Solar with virgin polysilicon sufficient to produce approximately 650 MW of solar modules in aggregate over six years. Delivery of polysilicon at predetermined prices is expected to start in the third quarter of 2009.
"This agreement marks another milestone in Trina Solar's siliconprocurement strategy. Through this new agreement with one of the leading emerging polysilicon producers, Trina has taken steps to further secure its long-term procurement needs while reducing the long-term cost of solar energy," said Jifan Gao, Trina Solar's Chairman and Chief Executive Officer. "This agreement will provide a significant portion of our production needs at favorable terms. Qingdao DTK's forward thinking management and advantageous positioning will ensure the success of this agreement."
"We are looking forward to our cooperation with Trina Solar that will help build a cleaner environment for future generations," said Indi Sohal,CEO of Qingdao DTK. "We share Trina's vision to expand the solar industry and make it the premier renewable energy choice. Qingdao DTK is excited to support and be a part of Trina Solar's vision to help build the Solar Industry."
This long-term polysilicon supply agreement will enhance the Company's raw material supplies to strengthen its position as a leading global PV module manufacturer. The addition of Qingdao DTK as a polysilicon supplier shall further diversify Trina Solar's overall polysilicon sourcing as well as increase its flexibility to respond to changing market conditions.
About Trina Solar Limited
Trina Solar Limited (NYSE: TSL), through its wholly-owned subsidiary Changzhou Trina Solar Energy Co. Ltd., is a well recognized manufacturer of high quality modules and has a long history as a solar PV pioneer since it was founded in 1997 as a system installation company. Trina Solar is currently one of the few PV manufacturers that has developed a vertically integrated business model from the production of monocrystalline and multicrystalline ingots, wafers and cells to the assembly of high quality modules. This integrated value chain helps to ensure that high quality products can be delivered to its end customers around the globe, including a number of European countries, such as Germany, Spain and Italy. TrinaSolar's solar modules provide reliable and environmentally-friendly electric power for residential, commercial, industrial and other applications worldwide. For further information, please visit Trina Solar's website at http://www.trinasolar.com .
About Jupiter Corporation Ltd. and DTK Industries (Qingdao) Co., Ltd.
Jupiter Corporation Ltd. and DTK Industries (Qingdao) Co., Ltd. are wholly European owned and operated companies belonging to the Sohal Family. Affiliate companies include Chinese manufacturing plants and European construction companies, uniform supply to the service industries and managed services for multinationals in Europe. For more informationcontact: http://www.dtk-global.com or email indi@dtk-global.com.
Under this agreement, Qingdao DTK will supply Trina Solar with virgin polysilicon sufficient to produce approximately 650 MW of solar modules in aggregate over six years. Delivery of polysilicon at predetermined prices is expected to start in the third quarter of 2009.
"This agreement marks another milestone in Trina Solar's siliconprocurement strategy. Through this new agreement with one of the leading emerging polysilicon producers, Trina has taken steps to further secure its long-term procurement needs while reducing the long-term cost of solar energy," said Jifan Gao, Trina Solar's Chairman and Chief Executive Officer. "This agreement will provide a significant portion of our production needs at favorable terms. Qingdao DTK's forward thinking management and advantageous positioning will ensure the success of this agreement."
"We are looking forward to our cooperation with Trina Solar that will help build a cleaner environment for future generations," said Indi Sohal,CEO of Qingdao DTK. "We share Trina's vision to expand the solar industry and make it the premier renewable energy choice. Qingdao DTK is excited to support and be a part of Trina Solar's vision to help build the Solar Industry."
This long-term polysilicon supply agreement will enhance the Company's raw material supplies to strengthen its position as a leading global PV module manufacturer. The addition of Qingdao DTK as a polysilicon supplier shall further diversify Trina Solar's overall polysilicon sourcing as well as increase its flexibility to respond to changing market conditions.
About Trina Solar Limited
Trina Solar Limited (NYSE: TSL), through its wholly-owned subsidiary Changzhou Trina Solar Energy Co. Ltd., is a well recognized manufacturer of high quality modules and has a long history as a solar PV pioneer since it was founded in 1997 as a system installation company. Trina Solar is currently one of the few PV manufacturers that has developed a vertically integrated business model from the production of monocrystalline and multicrystalline ingots, wafers and cells to the assembly of high quality modules. This integrated value chain helps to ensure that high quality products can be delivered to its end customers around the globe, including a number of European countries, such as Germany, Spain and Italy. TrinaSolar's solar modules provide reliable and environmentally-friendly electric power for residential, commercial, industrial and other applications worldwide. For further information, please visit Trina Solar's website at http://www.trinasolar.com .
About Jupiter Corporation Ltd. and DTK Industries (Qingdao) Co., Ltd.
Jupiter Corporation Ltd. and DTK Industries (Qingdao) Co., Ltd. are wholly European owned and operated companies belonging to the Sohal Family. Affiliate companies include Chinese manufacturing plants and European construction companies, uniform supply to the service industries and managed services for multinationals in Europe. For more informationcontact: http://www.dtk-global.com or email indi@dtk-global.com.
Yingli Green Energy Reports First Quarter 2008 Financial Results
BAODING, China--(BUSINESS WIRE)--Yingli Green Energy Holding Company Limited (NYSE: YGE) ("Yingli Green Energy" or the "Company"), one of the world's leading vertically integrated photovoltaic ("PV") product manufacturers, today announced its unaudited financial results for the first quarter ended March 31, 2008.
First Quarter 2008 Financial and Operating Highlights
Total net revenues were RMB 1,595.0 million (US$227.5 million), an increase of 9.8% from RMB 1,453.2 million in the fourth quarter of 2007 and an increase of 272.2% from RMB 428.6 million in the first quarter of 2007.
PV module shipments were 54.6 MW, an increase of 7.3% from 50.9 MW in the fourth quarter of 2007 and an increase of 274.4% from 14.6 MW in the first quarter of 2007.
Gross profit was RMB 392.3 million (US$55.9 million), an increase of 9.1% from RMB 359.6 million in the fourth quarter of 2007 and an increase of 337.8% from RMB 89.6 million in the first quarter of 2007.
Gross margin was 24.6% in the first quarter of 2008, in line with 24.7% in the fourth quarter of 2007 and an increase from 20.9% in the first quarter of 2007.
Net income was RMB 223.5 million (US$31.9 million), an increase of 61.5% from RMB 138.4 million in the fourth quarter of 2007 and an increase of 2,580.5% from RMB 8.3 million in the first quarter of 2007. Fully diluted earnings per ordinary share and per American depositary share ("ADS") were RMB 1.73 (US$0.25), compared to RMB 1.07 in the fourth quarter of 2007.
On an adjusted non-GAAP1 basis, net income was RMB 246.2 million (US$35.1 million), an increase of 56.5% from RMB 157.3 million in the fourth quarter of 2007. Fully diluted earnings per ordinary share and per ADS were RMB 1.90 (US$0.27), compared to RMB 1.21 in the fourth quarter of 2007.
"We had a strong start to the year as our first quarter came in ahead of our expectations," commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy.
"Our results largely demonstrated the successful execution of our vertically integrated strategy at the operating level and growing demand for our products in our end markets, including Spain, Germany, the United States and Italy, as well as new and emerging solar markets such as Korea and France. We believe that maintaining the highest standards in product quality and our growing brand recognition are key factors that have helped solidify our market share and build close relationships with our customers, particularly with utility companies for large on-grid power generation projects."
"Vertical integration and continued success in our R&D efforts have also given us greater flexibility to withstand fluctuations in raw material cost. Our polysilicon usage per watt has been declining quarter over quarter through process and technology advancement, including reduced wafer thickness and breakage rate and improved cell efficiency, equipment automation and product quality control procedure at each stage along the value chain. Our commercialization of 180 micron wafers at the beginning of February 2008 illustrates our strong capabilities in R&D."
"I am also very pleased that our expansion plan remains on track and that we currently expect to be able to achieve production capacity of 600 MW before mid-2009, ahead of schedule. As one of the world's leading vertically integrated PV product manufacturers in a rapidly growing PV market, we plan to continue to execute our business strategy to maximize shareholders’ value."
First Quarter 2008 Financial Results
Net Revenues
Net revenues were RMB 1,595.0 million (US$227.5 million) in the first quarter of 2008, which increased by 9.8% from RMB 1,453.2 million in the fourth quarter of 2007 and by 272.2% from RMB 428.6 million in the first quarter of 2007. The increase was primarily due to continued strong growth in market demand for PV modules, resulting in a higher average selling price and increased shipment volume. The average selling price for PV modules increased to US$4.11 per watt in the first quarter of 2008 from US$3.86 per watt in the fourth quarter of 2007. Total PV module shipments increased to 54.6 MW in the first quarter of 2008 from 50.9 MW in the fourth quarter of 2007, which was primarily due to improved throughput by process and technology advancement at the Company's existing manufacturing facilities as a result of continued success in our research and development efforts. Spain and Germany continued to be the Company's most important markets in the first quarter of 2008.
Gross Profit and Gross Margin
Gross profit in the first quarter of 2008 was RMB 392.3 million (US$55.9 million), which increased by 9.1% from RMB 359.6 million in the fourth quarter of 2007 and by 337.8% from RMB 89.6 million in the first quarter of 2007. Gross margin was 24.6% in the first quarter of 2008, in line with 24.7% in the fourth quarter of 2007 and increased from 20.9% in the first quarter of 2007. As a result of a higher average selling price compared to the fourth quarter of 2007, the lower polysilicon usage per watt resulted from successful research and development efforts and the lower processing cost attributable to continuous improvement in operational efficiency of the Company's vertically integrated business model, the Company was able to maintain its gross margin despite an increase in the average cost of polysilicon in the first quarter of 2008.
Operating Expenses
Operating expenses in the first quarter of 2008 were RMB 109.6 million (US$15.6 million), compared to RMB 92.6 million in the fourth quarter of 2007 and RMB 48.6 million in the first quarter of 2007. Operating expenses as a percentage of net revenues increased slightly to 6.9% in the first quarter of 2008 from 6.4% in the fourth quarter of 2007. The increase in operating expenses was primarily due to increased research and development expenses, marketing and promotional expenses and higher employment compensation and share-based compensation charges related to the share-based awards granted to senior executives and employees. The increase in research and development expenses was mainly related to the efforts to reduce wafer thickness from 200 microns to 180 microns. The increase in marketing and promotional expenses was primarily related to promotional efforts in new and emerging markets, including France and Korea.
Operating Income and Margin
Operating income in the first quarter of 2008 was RMB 282.7 million (US$40.3 million), which increased by 5.9% from RMB 267.0 million in the fourth quarter of 2007 and by 590.0% from RMB 41.0 million in the first quarter of 2007. The operating margin decreased to 17.7% in the first quarter of 2008 from 18.4% in the fourth quarter of 2007 and increased from 9.6% in the first quarter of 2007. The decrease in the first quarter of 2008 was primarily due to increased operating expenses.
Interest Expense
Interest expense was RMB 34.4 million (US$4.9 million) in the first quarter of 2008, which increased from RMB 19.6 million in the fourth quarter of 2007 and RMB 19.2 million in the first quarter of 2007. The increase from the fourth quarter of 2007 was due to an increase in the accrued yield on convertible notes upon maturity and amortization of issuance costs in connection with the convertible notes offering that was completed in December 2007. Short-term borrowings were RMB 804.6 million (US$114.7 million) at the end of the first quarter of 2008, which decreased from RMB 1,261.3 million at the end of the fourth quarter of 2007.
Foreign Currency Exchange Gain (Loss)
Foreign currency exchange gain was RMB 66.3 million (US$9.5 million) in the first quarter of 2008, compared to a foreign currency exchange loss of RMB 29.2 million in the fourth quarter of 2007 and a foreign currency exchange loss of RMB 0.1 million in the first quarter of 2007. The foreign currency exchange gain in the first quarter of 2008 was primarily due to the appreciation of the Euro against the Renminbi coupled with an increase in Euro-denominated sales, which was partially offset by the depreciation of the U.S. dollar against the Renminbi.
Net Income Before Minority Interest
Net income before minority interest was RMB 322.5 million (US$46.0 million) in the first quarter of 2008, which increased by 57.1% from RMB 205.2 million in the fourth quarter of 2007 and increased by 1,340.6% from RMB 22.4 million in the first quarter of 2007. The equity interest in Tianwei Yingli held by Baoding Tianwei Baobian Electric Co., Ltd. decreased from 29.89% to 25.99% effective on March 14, 2008, as a result of the acquisition of an additional 3.90% equity interest in Tianwei Yingli by Yingli Green Energy.
Income Tax Benefit (Expense)
Tianwei Yingli, the Company's principal operating subsidiary in the People's Republic of China (the "PRC"), is entitled to an exemption from the PRC enterprise income tax in 2007 and 2008. In the first quarter of 2008, the Company recorded income tax benefit of RMB 0.7 million (US$0.1 million), compared to an income tax expense of RMB 15.3 million in the fourth quarter of 2007 and income tax benefit of RMB 0.4 million in the first quarter of 2007. The income tax expenses incurred in the fourth quarter of 2007 was primarily due to an increase in the PRC enterprise income tax expenses of RMB 17.6 million, which resulted from a change in the estimated future income tax rates following the release of implementation guidance issued in December 2007 pertaining to the adoption of the new PRC Enterprise Income Tax Law.
Net Income
As a result of the aforementioned factors, net income was RMB 223.5 million (US$31.9 million) in the first quarter of 2008, which increased by 61.5% from RMB 138.4 million in the fourth quarter of 2007 and increased by 2,580.5% from RMB 8.3 million in the first quarter of 2007. Fully diluted earnings per ordinary share and per ADS were RMB 1.73 (US$0.25) in the first quarter of 2008, compared to RMB 1.07 in the fourth quarter of 2007.
On an adjusted non-GAAP basis, which excludes share-based compensation and amortization of intangible assets arising from purchase price allocation in connection with a series of acquisitions of equity interest in Tianwei Yingli, the Company's principal operating subsidiary, net income was RMB 246.2 million (US$35.1 million) in the first quarter of 2008, which increased by 56.5% from RMB 157.3 million in the fourth quarter of 2007. Adjusted non-GAAP fully diluted earnings per ordinary share and per ADS were RMB 1.90 (US$0.27) in the first quarter of 2008, compared to RMB 1.21 in the fourth quarter of 2007.
Balance Sheet Analysis
As of March 31, 2008, Yingli Green Energy had RMB 564.3 million (US$80.5 million) in cash and RMB 3,511.9 million (US$500.8 million) in working capital, compared to RMB 961.1 million in cash and RMB 3,513.2 million in working capital as of December 31, 2007. The decrease in cash from the fourth quarter of 2007 was primarily due to the repayment of certain matured short-term borrowings at the end of the first quarter of 2008. Days sales outstanding has been reduced to 66 days in the first quarter of 2008 from 77 days in the fourth quarter of 2007.
First Quarter 2008 Business Highlights
Reduced wafer thickness from 200 microns in 2007 to 180 microns at the beginning of February 2008, which the Company expects to benefit Yingli Green Energy by reducing its polysilicon usage per watt, increasing wafer output per ingot and contributing to a reduction in cost of goods sold.
Won a sales contract from Iberdrola Ingeniería y Construcción S.A.U., under which Yingli Green Energy supplied 11.56 MW of PV modules in the first quarter of 2008.
Announced a sales contract with EDF Energies Nouvelles ("EDF"), under which Yingli Green Energy will supply 7 MW of PV modules that are expected to be delivered in 2008. Under the sales contract, EDF has an option to purchase another 6 MW of PV modules in 2008.
Announced a sales contract with Recurrent Energy, Inc., a solar services provider based in San Francisco, U.S.A., for PV modules expected to be delivered in 2008.
Obtained approval from the relevant PRC governmental authorities and completed the planned additional capital contribution of RMB 1,750.8 million in Tianwei Yingli, the Company's principal operating subsidiary in China, which increased the Company's equity interest in Tianwei Yingli from 70.11% to 74.01%, effective March 14, 2008.
Signed two polysilicon supply agreements with DC Chemical Co., Ltd. ("DC Chemical"), a leading Korean chemicals producer. Under the first agreement, DC Chemical will supply polysilicon with a value of approximately US$27 million to Yingli Green Energy in 2008. Under the second agreement, DC Chemical will supply polysilicon with a total value of approximately US$188 million to Yingli Green Energy from 2009 to 2013.
Recent Business Highlights
Signed sales contracts with two Korean companies to supply 1.3 MW of PV modules to Korea Electric Power Industrial Development Corporation, a renewable energy company, and 2.0 MW of PV modules to Kaycom Corporation, a distributor of electronic components and PV devices.
Won a sales contract from IBC Solar AG ("IBC"), one of the leading specialists in PV systems worldwide. Under the terms of the contract, Yingli Green Energy is expected to supply a minimum of 35 MW of PV modules to IBC from May 2008 to December 2008. In addition, IBC has an option to purchase a maximum of another 45 MW of PV modules from Yingli Green Energy in 2009.
Signed a third polysilicon supply agreement with DC Chemical. Under the terms of the agreement, DC Chemical will supply polysilicon with a value of approximately US$39 million to Yingli Green Energy. The delivery period started in April 2008 and will end in December 2008.
Business Outlook for Full Year 2008
Based on the current market and operating conditions, estimated production capacity expansion and forecasted customer demand, the Company reaffirms its expected PV module shipment and net revenue targets for the full year 2008 as follows:
PV module shipments in the estimated range of approximately 255 MW to 265 MW, which represents a 78.9% to 86.0% increase compared to 2007.
Net revenues in the estimated range of approximately US$969 million and US$1,020 million, which represents a 74.1% to 83.3% increase compared to 2007.
Non-GAAP Financial Measures
To supplement the financial measures presented in accordance with generally accepted accounting principals in the United States, or GAAP, this press release includes certain non-GAAP financial measures of adjusted net income and adjusted earnings per ordinary share and per ADS, each of which is adjusted to exclude items related to share-based compensation and amortization of intangible assets arising from purchase price allocation in connection with a series of acquisitions of equity interest in Tianwei Yingli, the Company's principal operating subsidiary. The Company believes excluding these items from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such items are not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings. The Company also believes these non-GAAP financial measures are important to help investors understand the Company's current financial performance and future prospects and compare business trends among different reporting periods on a consistent basis. These non-GAAP financial measures should be considered in addition to financial measures presented in accordance with GAAP, but should not be considered as a substitute for, or superior to, financial measures presented in accordance with GAAP. For a reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see the financial information included elsewhere in this press release.
Currency Convenience Translation
The conversion of Renminbi into U.S. dollars for the first quarter of 2008 in this earnings release, made solely for the purpose of reader's convenience, is based on the noon buying rate in the New York City for cable transfers of Renminbi as certified for customs purpose by the Federal Reserve Bank of New York as of March 31, 2008, which was RMB 7.0120 to US$1.00. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at such rate, or at any other rate. The percentages stated in this earnings release are calculated based on Renminbi.
First Quarter 2008 Financial and Operating Highlights
Total net revenues were RMB 1,595.0 million (US$227.5 million), an increase of 9.8% from RMB 1,453.2 million in the fourth quarter of 2007 and an increase of 272.2% from RMB 428.6 million in the first quarter of 2007.
PV module shipments were 54.6 MW, an increase of 7.3% from 50.9 MW in the fourth quarter of 2007 and an increase of 274.4% from 14.6 MW in the first quarter of 2007.
Gross profit was RMB 392.3 million (US$55.9 million), an increase of 9.1% from RMB 359.6 million in the fourth quarter of 2007 and an increase of 337.8% from RMB 89.6 million in the first quarter of 2007.
Gross margin was 24.6% in the first quarter of 2008, in line with 24.7% in the fourth quarter of 2007 and an increase from 20.9% in the first quarter of 2007.
Net income was RMB 223.5 million (US$31.9 million), an increase of 61.5% from RMB 138.4 million in the fourth quarter of 2007 and an increase of 2,580.5% from RMB 8.3 million in the first quarter of 2007. Fully diluted earnings per ordinary share and per American depositary share ("ADS") were RMB 1.73 (US$0.25), compared to RMB 1.07 in the fourth quarter of 2007.
On an adjusted non-GAAP1 basis, net income was RMB 246.2 million (US$35.1 million), an increase of 56.5% from RMB 157.3 million in the fourth quarter of 2007. Fully diluted earnings per ordinary share and per ADS were RMB 1.90 (US$0.27), compared to RMB 1.21 in the fourth quarter of 2007.
"We had a strong start to the year as our first quarter came in ahead of our expectations," commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy.
"Our results largely demonstrated the successful execution of our vertically integrated strategy at the operating level and growing demand for our products in our end markets, including Spain, Germany, the United States and Italy, as well as new and emerging solar markets such as Korea and France. We believe that maintaining the highest standards in product quality and our growing brand recognition are key factors that have helped solidify our market share and build close relationships with our customers, particularly with utility companies for large on-grid power generation projects."
"Vertical integration and continued success in our R&D efforts have also given us greater flexibility to withstand fluctuations in raw material cost. Our polysilicon usage per watt has been declining quarter over quarter through process and technology advancement, including reduced wafer thickness and breakage rate and improved cell efficiency, equipment automation and product quality control procedure at each stage along the value chain. Our commercialization of 180 micron wafers at the beginning of February 2008 illustrates our strong capabilities in R&D."
"I am also very pleased that our expansion plan remains on track and that we currently expect to be able to achieve production capacity of 600 MW before mid-2009, ahead of schedule. As one of the world's leading vertically integrated PV product manufacturers in a rapidly growing PV market, we plan to continue to execute our business strategy to maximize shareholders’ value."
First Quarter 2008 Financial Results
Net Revenues
Net revenues were RMB 1,595.0 million (US$227.5 million) in the first quarter of 2008, which increased by 9.8% from RMB 1,453.2 million in the fourth quarter of 2007 and by 272.2% from RMB 428.6 million in the first quarter of 2007. The increase was primarily due to continued strong growth in market demand for PV modules, resulting in a higher average selling price and increased shipment volume. The average selling price for PV modules increased to US$4.11 per watt in the first quarter of 2008 from US$3.86 per watt in the fourth quarter of 2007. Total PV module shipments increased to 54.6 MW in the first quarter of 2008 from 50.9 MW in the fourth quarter of 2007, which was primarily due to improved throughput by process and technology advancement at the Company's existing manufacturing facilities as a result of continued success in our research and development efforts. Spain and Germany continued to be the Company's most important markets in the first quarter of 2008.
Gross Profit and Gross Margin
Gross profit in the first quarter of 2008 was RMB 392.3 million (US$55.9 million), which increased by 9.1% from RMB 359.6 million in the fourth quarter of 2007 and by 337.8% from RMB 89.6 million in the first quarter of 2007. Gross margin was 24.6% in the first quarter of 2008, in line with 24.7% in the fourth quarter of 2007 and increased from 20.9% in the first quarter of 2007. As a result of a higher average selling price compared to the fourth quarter of 2007, the lower polysilicon usage per watt resulted from successful research and development efforts and the lower processing cost attributable to continuous improvement in operational efficiency of the Company's vertically integrated business model, the Company was able to maintain its gross margin despite an increase in the average cost of polysilicon in the first quarter of 2008.
Operating Expenses
Operating expenses in the first quarter of 2008 were RMB 109.6 million (US$15.6 million), compared to RMB 92.6 million in the fourth quarter of 2007 and RMB 48.6 million in the first quarter of 2007. Operating expenses as a percentage of net revenues increased slightly to 6.9% in the first quarter of 2008 from 6.4% in the fourth quarter of 2007. The increase in operating expenses was primarily due to increased research and development expenses, marketing and promotional expenses and higher employment compensation and share-based compensation charges related to the share-based awards granted to senior executives and employees. The increase in research and development expenses was mainly related to the efforts to reduce wafer thickness from 200 microns to 180 microns. The increase in marketing and promotional expenses was primarily related to promotional efforts in new and emerging markets, including France and Korea.
Operating Income and Margin
Operating income in the first quarter of 2008 was RMB 282.7 million (US$40.3 million), which increased by 5.9% from RMB 267.0 million in the fourth quarter of 2007 and by 590.0% from RMB 41.0 million in the first quarter of 2007. The operating margin decreased to 17.7% in the first quarter of 2008 from 18.4% in the fourth quarter of 2007 and increased from 9.6% in the first quarter of 2007. The decrease in the first quarter of 2008 was primarily due to increased operating expenses.
Interest Expense
Interest expense was RMB 34.4 million (US$4.9 million) in the first quarter of 2008, which increased from RMB 19.6 million in the fourth quarter of 2007 and RMB 19.2 million in the first quarter of 2007. The increase from the fourth quarter of 2007 was due to an increase in the accrued yield on convertible notes upon maturity and amortization of issuance costs in connection with the convertible notes offering that was completed in December 2007. Short-term borrowings were RMB 804.6 million (US$114.7 million) at the end of the first quarter of 2008, which decreased from RMB 1,261.3 million at the end of the fourth quarter of 2007.
Foreign Currency Exchange Gain (Loss)
Foreign currency exchange gain was RMB 66.3 million (US$9.5 million) in the first quarter of 2008, compared to a foreign currency exchange loss of RMB 29.2 million in the fourth quarter of 2007 and a foreign currency exchange loss of RMB 0.1 million in the first quarter of 2007. The foreign currency exchange gain in the first quarter of 2008 was primarily due to the appreciation of the Euro against the Renminbi coupled with an increase in Euro-denominated sales, which was partially offset by the depreciation of the U.S. dollar against the Renminbi.
Net Income Before Minority Interest
Net income before minority interest was RMB 322.5 million (US$46.0 million) in the first quarter of 2008, which increased by 57.1% from RMB 205.2 million in the fourth quarter of 2007 and increased by 1,340.6% from RMB 22.4 million in the first quarter of 2007. The equity interest in Tianwei Yingli held by Baoding Tianwei Baobian Electric Co., Ltd. decreased from 29.89% to 25.99% effective on March 14, 2008, as a result of the acquisition of an additional 3.90% equity interest in Tianwei Yingli by Yingli Green Energy.
Income Tax Benefit (Expense)
Tianwei Yingli, the Company's principal operating subsidiary in the People's Republic of China (the "PRC"), is entitled to an exemption from the PRC enterprise income tax in 2007 and 2008. In the first quarter of 2008, the Company recorded income tax benefit of RMB 0.7 million (US$0.1 million), compared to an income tax expense of RMB 15.3 million in the fourth quarter of 2007 and income tax benefit of RMB 0.4 million in the first quarter of 2007. The income tax expenses incurred in the fourth quarter of 2007 was primarily due to an increase in the PRC enterprise income tax expenses of RMB 17.6 million, which resulted from a change in the estimated future income tax rates following the release of implementation guidance issued in December 2007 pertaining to the adoption of the new PRC Enterprise Income Tax Law.
Net Income
As a result of the aforementioned factors, net income was RMB 223.5 million (US$31.9 million) in the first quarter of 2008, which increased by 61.5% from RMB 138.4 million in the fourth quarter of 2007 and increased by 2,580.5% from RMB 8.3 million in the first quarter of 2007. Fully diluted earnings per ordinary share and per ADS were RMB 1.73 (US$0.25) in the first quarter of 2008, compared to RMB 1.07 in the fourth quarter of 2007.
On an adjusted non-GAAP basis, which excludes share-based compensation and amortization of intangible assets arising from purchase price allocation in connection with a series of acquisitions of equity interest in Tianwei Yingli, the Company's principal operating subsidiary, net income was RMB 246.2 million (US$35.1 million) in the first quarter of 2008, which increased by 56.5% from RMB 157.3 million in the fourth quarter of 2007. Adjusted non-GAAP fully diluted earnings per ordinary share and per ADS were RMB 1.90 (US$0.27) in the first quarter of 2008, compared to RMB 1.21 in the fourth quarter of 2007.
Balance Sheet Analysis
As of March 31, 2008, Yingli Green Energy had RMB 564.3 million (US$80.5 million) in cash and RMB 3,511.9 million (US$500.8 million) in working capital, compared to RMB 961.1 million in cash and RMB 3,513.2 million in working capital as of December 31, 2007. The decrease in cash from the fourth quarter of 2007 was primarily due to the repayment of certain matured short-term borrowings at the end of the first quarter of 2008. Days sales outstanding has been reduced to 66 days in the first quarter of 2008 from 77 days in the fourth quarter of 2007.
First Quarter 2008 Business Highlights
Reduced wafer thickness from 200 microns in 2007 to 180 microns at the beginning of February 2008, which the Company expects to benefit Yingli Green Energy by reducing its polysilicon usage per watt, increasing wafer output per ingot and contributing to a reduction in cost of goods sold.
Won a sales contract from Iberdrola Ingeniería y Construcción S.A.U., under which Yingli Green Energy supplied 11.56 MW of PV modules in the first quarter of 2008.
Announced a sales contract with EDF Energies Nouvelles ("EDF"), under which Yingli Green Energy will supply 7 MW of PV modules that are expected to be delivered in 2008. Under the sales contract, EDF has an option to purchase another 6 MW of PV modules in 2008.
Announced a sales contract with Recurrent Energy, Inc., a solar services provider based in San Francisco, U.S.A., for PV modules expected to be delivered in 2008.
Obtained approval from the relevant PRC governmental authorities and completed the planned additional capital contribution of RMB 1,750.8 million in Tianwei Yingli, the Company's principal operating subsidiary in China, which increased the Company's equity interest in Tianwei Yingli from 70.11% to 74.01%, effective March 14, 2008.
Signed two polysilicon supply agreements with DC Chemical Co., Ltd. ("DC Chemical"), a leading Korean chemicals producer. Under the first agreement, DC Chemical will supply polysilicon with a value of approximately US$27 million to Yingli Green Energy in 2008. Under the second agreement, DC Chemical will supply polysilicon with a total value of approximately US$188 million to Yingli Green Energy from 2009 to 2013.
Recent Business Highlights
Signed sales contracts with two Korean companies to supply 1.3 MW of PV modules to Korea Electric Power Industrial Development Corporation, a renewable energy company, and 2.0 MW of PV modules to Kaycom Corporation, a distributor of electronic components and PV devices.
Won a sales contract from IBC Solar AG ("IBC"), one of the leading specialists in PV systems worldwide. Under the terms of the contract, Yingli Green Energy is expected to supply a minimum of 35 MW of PV modules to IBC from May 2008 to December 2008. In addition, IBC has an option to purchase a maximum of another 45 MW of PV modules from Yingli Green Energy in 2009.
Signed a third polysilicon supply agreement with DC Chemical. Under the terms of the agreement, DC Chemical will supply polysilicon with a value of approximately US$39 million to Yingli Green Energy. The delivery period started in April 2008 and will end in December 2008.
Business Outlook for Full Year 2008
Based on the current market and operating conditions, estimated production capacity expansion and forecasted customer demand, the Company reaffirms its expected PV module shipment and net revenue targets for the full year 2008 as follows:
PV module shipments in the estimated range of approximately 255 MW to 265 MW, which represents a 78.9% to 86.0% increase compared to 2007.
Net revenues in the estimated range of approximately US$969 million and US$1,020 million, which represents a 74.1% to 83.3% increase compared to 2007.
Non-GAAP Financial Measures
To supplement the financial measures presented in accordance with generally accepted accounting principals in the United States, or GAAP, this press release includes certain non-GAAP financial measures of adjusted net income and adjusted earnings per ordinary share and per ADS, each of which is adjusted to exclude items related to share-based compensation and amortization of intangible assets arising from purchase price allocation in connection with a series of acquisitions of equity interest in Tianwei Yingli, the Company's principal operating subsidiary. The Company believes excluding these items from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such items are not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings. The Company also believes these non-GAAP financial measures are important to help investors understand the Company's current financial performance and future prospects and compare business trends among different reporting periods on a consistent basis. These non-GAAP financial measures should be considered in addition to financial measures presented in accordance with GAAP, but should not be considered as a substitute for, or superior to, financial measures presented in accordance with GAAP. For a reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see the financial information included elsewhere in this press release.
Currency Convenience Translation
The conversion of Renminbi into U.S. dollars for the first quarter of 2008 in this earnings release, made solely for the purpose of reader's convenience, is based on the noon buying rate in the New York City for cable transfers of Renminbi as certified for customs purpose by the Federal Reserve Bank of New York as of March 31, 2008, which was RMB 7.0120 to US$1.00. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at such rate, or at any other rate. The percentages stated in this earnings release are calculated based on Renminbi.
Green Energy to progress with solar wafer plant investment in China
Nuying Huang, Taipei; Esther Lam, DIGITIMES [Thursday 15 May 2008]
Green Energy Technology will soon host a shareholders meeting to discuss its investment plans in China. If shareholders approve, the solar wafer maker is likely to establish a plant at Shangdong, China, according to industry sources.
Green Energy will hold a shareholders meeting on May 16 to discuss its future deployment in China. Company president Hurlon Lin indicated that the company will likely be more aggressive in making investments across the strait after the meeting, but declined to reveal more details.
Green Energy has spent about a year assessing potential investment opportunities in various cities in China, including Shangdong, Shanghai and Jinzhou, with Shangdong as the most likely location, according to industry sources. It is believed that Green Energy to start with solar ingot slicing before investing in ingot production, since the company is short of ingot slicing capacity. Currently about 30-40% of its solar wafer slicing work is outsourced to third parties, the sources explained. They added in saying that Green Energy is experienced in ingot slicing, with gross margin from the segment stable at 30-35%.
Industry players generally feel Green Energy has chosen a good time to extend into China as the China government is offering favorable incentives to investors in order to aggressively grow the country's solar industry.
Green Energy Technology will soon host a shareholders meeting to discuss its investment plans in China. If shareholders approve, the solar wafer maker is likely to establish a plant at Shangdong, China, according to industry sources.
Green Energy will hold a shareholders meeting on May 16 to discuss its future deployment in China. Company president Hurlon Lin indicated that the company will likely be more aggressive in making investments across the strait after the meeting, but declined to reveal more details.
Green Energy has spent about a year assessing potential investment opportunities in various cities in China, including Shangdong, Shanghai and Jinzhou, with Shangdong as the most likely location, according to industry sources. It is believed that Green Energy to start with solar ingot slicing before investing in ingot production, since the company is short of ingot slicing capacity. Currently about 30-40% of its solar wafer slicing work is outsourced to third parties, the sources explained. They added in saying that Green Energy is experienced in ingot slicing, with gross margin from the segment stable at 30-35%.
Industry players generally feel Green Energy has chosen a good time to extend into China as the China government is offering favorable incentives to investors in order to aggressively grow the country's solar industry.
ReneSola Ltd Announces First Quarter 2008 Results
May 14, 2008
JIASHAN, China, May 14 /Xinhua-PRNewswire/ -- ReneSola Ltd ("ReneSola" or the "Company"), a leading Chinese manufacturer of solar wafers, today announced its unaudited financial results for the first quarter ended March 31, 2008.
Financial and Business Highlights
-- First quarter 2008 net revenues were US$123.0 million, an increase of 242.4% from US$35.9 million in the first quarter of 2007, and an increase of 28.0% from US$96.0 million in the fourth quarter of 2007.
-- First quarter 2008 gross margin was 22.1% compared to 20.4% in the fourth quarter of 2007.
-- First quarter 2008 net income was US$17.7 million, an increase of 160.6% from US$6.8million in the first quarter of 2007, and an increase of 1.2% from US$17.5 million in the fourth quarter of 2007.
-- First quarter 2008 basic and diluted earnings per share were US$0.15 and US$0.14, respectively, and basic and diluted earnings per ADS were US$0.30 and US$0.28, respectively. Each ADS represents two shares.
-- First quarter production output was 66.5 MW, an increase of 29.6% from 51.3 MW in the fourth quarter of 2007, exceeding previously issued guidance of 62 MW.
-- Silicon consumption rate decreased to 6.3 grams per watt in the first quarter of 2008 from 6.5 grams per watt in the fourth quarter of 2007.
-- Wafer production capacity is planned to increase to 1,000 MW by the end of 2009.
Three months ended,
March 31, December 31, March 31,
2007 2007 2008
Net revenue (US$000) 35,916 96,046 122,982
Gross profit (US$000) 8,152 19,619 27,234
Gross margin (%) 22.7% 20.4% 22.1%
Operating profit (US$000) 6,939 15,000 23,187
Foreign exchange gain (loss) (US$000) (63) (1,174) (56)
Income tax benefit (expense) (US$000) 23 5,171 (3,560)
Net income for the period (US$000) 6,783 17,471 17,675
Production output (MW) 15.3 51.3 66.5
"We exceeded our targeted output and once again achieved record revenues for the quarter," said Mr. Xianshou Li, ReneSola's chief executive officer. "During the first quarter, we increased production output to 66.5 MW through the successful ramp-up of production capacity that was installed in the fourth quarter of 2007. This resulted in substantial growth in revenue and operating profits. Our dedication to efficient production processes and innovation continued to yield impressive performance."
In January 2008, we completed our initial public offering on the New York Stock Exchange, generating net proceeds of approximately US$109.0 million, continued Mr. Li. The listing strengthened our balance sheet and increased our brand recognition. We remain optimistic about the remainder of 2008, and are committed to growing in order to meet increasing demand for our high quality wafer products.
Financial Results for the First Quarter
Net revenues
Net revenues for the first quarter of 2008 were US$123.0 million, an increase of 28.0% sequentially and 242.4% year-over-year. The increase in first quarter revenues was primarily attributable to an increase in output from the expanded production capacity and increasing wafer ASPs.
Gross profit
First quarter 2008 gross profit was US$27.2 million, a 38.8% increase sequentially and 234.1% year-over-year. The gross margin for the first quarter 2008 was 22.1% compared to 20.4% in the fourth quarter of 2007. The increase in gross margin was achieved despite an increase in average feedstock costs of 21.0% sequentially and was primarily attributable to a further reduction in silicon consumption rate to 6.3 grams per watt from 6.5 grams per watt in fourth quarter of 2007, a continuing reduction in non-raw material related production costs and an increase in wafer ASPs due to the high demand for our wafer products.
Operating profit
Operating profit in the first quarter of 2008 was US$23.2 million, an increase of 54.6% sequentially and 234.2% year-over-year. Operating margin was 18.9% in the first quarter compared to 15.6% in the fourth quarter of 2007. Total operating expenses in the first quarter of 2008 were US$4.0 million, down from US$4.6 million in the fourth quarter of 2007.
Profit before tax
Profit before tax in the first quarter was US$21.3 million, a 72.2% increase sequentially and 215.0% increase year-over-year. Finance costs increased by 26.9% sequentially, reflecting increased bank borrowings and interest rates. Finance costs as a percentage of net revenue decreased from 1.8% in the fourth quarter of 2007 to 1.7% in the first quarter of 2008. The first quarter foreign exchange loss was US$0.06 million compared to foreign exchange loss of US$1.2 million in the fourth quarter of 2007.
Taxation
We recognized a tax charge of US$3.6 million in the first quarter of 2008, compared to a tax credit of US$5.2 million in the fourth quarter of 2007. ReneSola's subsidiary, Zhejiang Yuhui Solar Energy Source Co. Ltd, ("Zhejiang Yuhui"), after the first two years of exemptions, is now subject to a tax rate of 12.5% under the new PRC Enterprise Income Tax Law, or the EIT Law. The current applicable tax rate is half the statutory rate of 25%, which is expected to apply to Zhejiang Yuhui, effective from the beginning of 2010. Furthermore, in 2007 Zhejiang Yuhui received an income tax credit equivalent to 40% of the cost of capital equipment manufactured in the PRC. This tax policy has now been withdrawn from 2008 with the enactment of the New Enterprise Income Tax Law.
Net profit
First quarter 2008 net profit increased 1.2% sequentially and 160.6% year- over-year to US$17.7 million.
Other Recent Business Developments
ReneSola announced on November 19, 2007 that it planned to develop a polysilicon manufacturing facility with an annualized capacity of 1,500 tons in Meishan, Sichuan province, China. With a substantial pipeline of wafer sales secured under various long term contracts and strong customer interest in signing further long-term contracts, ReneSola has decided to increase the previously announced 1,500 tons of annual polysilicon manufacturing to 3,000 tons on the same site in Meishan to secure more in-house polysilicon supplies. Land leveling has been completed and construction has commenced with completion expected in early 2009. The facility is expected to be operational in the first half of 2009. As part of the project, ReneSola has signed purchasing contracts and made down-payments for major capital equipment from world-class international equipment suppliers.
On May 12, 2008 an earthquake with a magnitude of 7.8 struck China's Sichuan province. There was no damage to ReneSola's facilities and construction remains on schedule. ReneSola does not expect the earthquake to have a material effect on its operations in Sichuan province.
Production Capacity
With our current facilities reaching full capacity and strong customer demand for additional wafer sales contracts, ReneSola is pleased to announce a further expansion in its wafer manufacturing capacity to 1,000 MW by the end of 2009. The Company believes the new wafer manufacturing capacity will provide important ramp-up capabilities to meet increasing market demand. Negotiations on equipment purchases are currently under way and are expected to be completed within the next couple of months.
Second Quarter Outlook
We anticipate production output to be in the range of 75 MW to 80 MW in the second quarter of 2008 compared to 66.5 MW in the first quarter of 2008 and 23 MW in the second quarter of 2007. Gross margin for the second quarter of 2008 is expected to remain stable. On April 17, 2008, we increased previously issued full year 2008 production output to 310 MW to 320 MW and revenue guidance to US$530 million to US$550 million for 2008. We are once again increasing our outlook for full year 2008 and expect production output to be in the range of 330 MW to 340 MW with annual net revenues of approximately US$570 million to US$590 million.
JIASHAN, China, May 14 /Xinhua-PRNewswire/ -- ReneSola Ltd ("ReneSola" or the "Company"), a leading Chinese manufacturer of solar wafers, today announced its unaudited financial results for the first quarter ended March 31, 2008.
Financial and Business Highlights
-- First quarter 2008 net revenues were US$123.0 million, an increase of 242.4% from US$35.9 million in the first quarter of 2007, and an increase of 28.0% from US$96.0 million in the fourth quarter of 2007.
-- First quarter 2008 gross margin was 22.1% compared to 20.4% in the fourth quarter of 2007.
-- First quarter 2008 net income was US$17.7 million, an increase of 160.6% from US$6.8million in the first quarter of 2007, and an increase of 1.2% from US$17.5 million in the fourth quarter of 2007.
-- First quarter 2008 basic and diluted earnings per share were US$0.15 and US$0.14, respectively, and basic and diluted earnings per ADS were US$0.30 and US$0.28, respectively. Each ADS represents two shares.
-- First quarter production output was 66.5 MW, an increase of 29.6% from 51.3 MW in the fourth quarter of 2007, exceeding previously issued guidance of 62 MW.
-- Silicon consumption rate decreased to 6.3 grams per watt in the first quarter of 2008 from 6.5 grams per watt in the fourth quarter of 2007.
-- Wafer production capacity is planned to increase to 1,000 MW by the end of 2009.
Three months ended,
March 31, December 31, March 31,
2007 2007 2008
Net revenue (US$000) 35,916 96,046 122,982
Gross profit (US$000) 8,152 19,619 27,234
Gross margin (%) 22.7% 20.4% 22.1%
Operating profit (US$000) 6,939 15,000 23,187
Foreign exchange gain (loss) (US$000) (63) (1,174) (56)
Income tax benefit (expense) (US$000) 23 5,171 (3,560)
Net income for the period (US$000) 6,783 17,471 17,675
Production output (MW) 15.3 51.3 66.5
"We exceeded our targeted output and once again achieved record revenues for the quarter," said Mr. Xianshou Li, ReneSola's chief executive officer. "During the first quarter, we increased production output to 66.5 MW through the successful ramp-up of production capacity that was installed in the fourth quarter of 2007. This resulted in substantial growth in revenue and operating profits. Our dedication to efficient production processes and innovation continued to yield impressive performance."
In January 2008, we completed our initial public offering on the New York Stock Exchange, generating net proceeds of approximately US$109.0 million, continued Mr. Li. The listing strengthened our balance sheet and increased our brand recognition. We remain optimistic about the remainder of 2008, and are committed to growing in order to meet increasing demand for our high quality wafer products.
Financial Results for the First Quarter
Net revenues
Net revenues for the first quarter of 2008 were US$123.0 million, an increase of 28.0% sequentially and 242.4% year-over-year. The increase in first quarter revenues was primarily attributable to an increase in output from the expanded production capacity and increasing wafer ASPs.
Gross profit
First quarter 2008 gross profit was US$27.2 million, a 38.8% increase sequentially and 234.1% year-over-year. The gross margin for the first quarter 2008 was 22.1% compared to 20.4% in the fourth quarter of 2007. The increase in gross margin was achieved despite an increase in average feedstock costs of 21.0% sequentially and was primarily attributable to a further reduction in silicon consumption rate to 6.3 grams per watt from 6.5 grams per watt in fourth quarter of 2007, a continuing reduction in non-raw material related production costs and an increase in wafer ASPs due to the high demand for our wafer products.
Operating profit
Operating profit in the first quarter of 2008 was US$23.2 million, an increase of 54.6% sequentially and 234.2% year-over-year. Operating margin was 18.9% in the first quarter compared to 15.6% in the fourth quarter of 2007. Total operating expenses in the first quarter of 2008 were US$4.0 million, down from US$4.6 million in the fourth quarter of 2007.
Profit before tax
Profit before tax in the first quarter was US$21.3 million, a 72.2% increase sequentially and 215.0% increase year-over-year. Finance costs increased by 26.9% sequentially, reflecting increased bank borrowings and interest rates. Finance costs as a percentage of net revenue decreased from 1.8% in the fourth quarter of 2007 to 1.7% in the first quarter of 2008. The first quarter foreign exchange loss was US$0.06 million compared to foreign exchange loss of US$1.2 million in the fourth quarter of 2007.
Taxation
We recognized a tax charge of US$3.6 million in the first quarter of 2008, compared to a tax credit of US$5.2 million in the fourth quarter of 2007. ReneSola's subsidiary, Zhejiang Yuhui Solar Energy Source Co. Ltd, ("Zhejiang Yuhui"), after the first two years of exemptions, is now subject to a tax rate of 12.5% under the new PRC Enterprise Income Tax Law, or the EIT Law. The current applicable tax rate is half the statutory rate of 25%, which is expected to apply to Zhejiang Yuhui, effective from the beginning of 2010. Furthermore, in 2007 Zhejiang Yuhui received an income tax credit equivalent to 40% of the cost of capital equipment manufactured in the PRC. This tax policy has now been withdrawn from 2008 with the enactment of the New Enterprise Income Tax Law.
Net profit
First quarter 2008 net profit increased 1.2% sequentially and 160.6% year- over-year to US$17.7 million.
Other Recent Business Developments
ReneSola announced on November 19, 2007 that it planned to develop a polysilicon manufacturing facility with an annualized capacity of 1,500 tons in Meishan, Sichuan province, China. With a substantial pipeline of wafer sales secured under various long term contracts and strong customer interest in signing further long-term contracts, ReneSola has decided to increase the previously announced 1,500 tons of annual polysilicon manufacturing to 3,000 tons on the same site in Meishan to secure more in-house polysilicon supplies. Land leveling has been completed and construction has commenced with completion expected in early 2009. The facility is expected to be operational in the first half of 2009. As part of the project, ReneSola has signed purchasing contracts and made down-payments for major capital equipment from world-class international equipment suppliers.
On May 12, 2008 an earthquake with a magnitude of 7.8 struck China's Sichuan province. There was no damage to ReneSola's facilities and construction remains on schedule. ReneSola does not expect the earthquake to have a material effect on its operations in Sichuan province.
Production Capacity
With our current facilities reaching full capacity and strong customer demand for additional wafer sales contracts, ReneSola is pleased to announce a further expansion in its wafer manufacturing capacity to 1,000 MW by the end of 2009. The Company believes the new wafer manufacturing capacity will provide important ramp-up capabilities to meet increasing market demand. Negotiations on equipment purchases are currently under way and are expected to be completed within the next couple of months.
Second Quarter Outlook
We anticipate production output to be in the range of 75 MW to 80 MW in the second quarter of 2008 compared to 66.5 MW in the first quarter of 2008 and 23 MW in the second quarter of 2007. Gross margin for the second quarter of 2008 is expected to remain stable. On April 17, 2008, we increased previously issued full year 2008 production output to 310 MW to 320 MW and revenue guidance to US$530 million to US$550 million for 2008. We are once again increasing our outlook for full year 2008 and expect production output to be in the range of 330 MW to 340 MW with annual net revenues of approximately US$570 million to US$590 million.
ReneSola Announces Six-Year 525 MW Solar Wafer Supply Agreement with Gintech Energy Corporation
JIASHAN, China, May 14 /Xinhua-PRNewswire-FirstCall/ -- ReneSola Ltd("ReneSola" or the "Company") (NYSE: SOL) (AIM: SOLA.L), a leading Chinesemanufacturer of solar wafers, today announced that it has signed a six-year525 megawatt ("MW") wafer supply agreement with Gintech Energy Corporation("Gintech").
Under the terms of the agreement, ReneSola will supply Gintech with 525MW of solar wafers over a six-year period commencing in mid-2008. Gintechis a leading manufacturer of solar cells and is publicly traded on theTaiwan Stock Exchange.
"The recent wafer supply agreement with Gintech further demonstrates our commitment to expanding ReneSola's reach within key markets and strengthens our base of long-term customers," said Mr. Xianshou Li, ReneSola's chief executive officer. "Gintech's fast growth and well-known manufacturing capabilities will contribute to a diversified customer baseas we increase our wafer production output."
About ReneSola
ReneSola Ltd ("ReneSola") is a leading solar wafer manufacturer in China. Capitalizing on proprietary technologies and technical know-how, ReneSola manufactures monocrystalline and multicrystalline solar wafers, which are thin sheets of crystalline silicon material primarily used in the production of solar cells. In addition, ReneSola strives to enhance its competitiveness through upstream integration into virgin polysilicon manufacturing. ReneSola possesses a global network of suppliers and customers that include some of the leading global manufacturers of solar cells and modules. ReneSola's shares are currently traded on the New York Stock Exchange (NYSE: SOL) and the AIM of the London Stock Exchange (AIM:SOLA.L). For more information about ReneSola, please visit http://www.renesola.com .
Under the terms of the agreement, ReneSola will supply Gintech with 525MW of solar wafers over a six-year period commencing in mid-2008. Gintechis a leading manufacturer of solar cells and is publicly traded on theTaiwan Stock Exchange.
"The recent wafer supply agreement with Gintech further demonstrates our commitment to expanding ReneSola's reach within key markets and strengthens our base of long-term customers," said Mr. Xianshou Li, ReneSola's chief executive officer. "Gintech's fast growth and well-known manufacturing capabilities will contribute to a diversified customer baseas we increase our wafer production output."
About ReneSola
ReneSola Ltd ("ReneSola") is a leading solar wafer manufacturer in China. Capitalizing on proprietary technologies and technical know-how, ReneSola manufactures monocrystalline and multicrystalline solar wafers, which are thin sheets of crystalline silicon material primarily used in the production of solar cells. In addition, ReneSola strives to enhance its competitiveness through upstream integration into virgin polysilicon manufacturing. ReneSola possesses a global network of suppliers and customers that include some of the leading global manufacturers of solar cells and modules. ReneSola's shares are currently traded on the New York Stock Exchange (NYSE: SOL) and the AIM of the London Stock Exchange (AIM:SOLA.L). For more information about ReneSola, please visit http://www.renesola.com .
Hoku and Solarfun Approve Amendment and Extension of Polysilicon Supply Agreement
May 13, 2008: 06:45 AM EST
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU), established to manufacture and sell polysilicon for the solar market, and Solarfun Power Hong Kong Limited, a subsidiary of Solarfun Power Holdings Co., Ltd. (NASDAQ: SOLF), an established manufacturer of both photovoltaic (PV) cells and modules in China, today announced that they have amended their polysilicon supply contract to increase the term of the contract from eight to ten years. Total amounts that may be payable to Hoku Materials under the contract have increased from up to approximately $306 million for the eight year contract, to up to approximately $384 million for the amended ten year contract. Hoku Materials and Solarfun also agreed to a mutual right to terminate the supply agreement if Hoku Materials is unable to raise an aggregate of $75 million in financing for its polysilicon production plant by December 31, 2008 (including the $25 million that was already raised by Hoku Scientific's sale of common stock in February 2008). Solarfun may also terminate the agreement if Hoku Materials is unable to complete polysilicon shipment milestones and quality specifications by December 31, 2009.
"We're strengthening our relationship with Solarfun by extending the term from eight to ten years," said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. "A ten-year term allows us to better plan for our long-term operations, including the timing of future product sales and plant expansions. Adding the financing milestone gives each company the flexibility to terminate the contract if Hoku is ultimately unable to finance the completion of the plant. This makes sense for both companies, as it would be impossible to honor a long-term purchase and supply commitment if the plant is ultimately not built."
"We are pleased with the amendment of our contract with Hoku," said Solarfun's chief executive officer, Harold Hoskens. "We look forward to their timely delivery of polysilicon as scheduled by the 2nd half of 2009."
About Hoku Scientific, Inc.
Hoku Scientific, Inc. (NASDAQ: HOKU) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar is a provider of turnkey photovoltaic systems in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells. For more information visit www.hokuscientific.com.
Hoku® and Hoku Scientific® are registered trademarks and Hoku Solar(TM) and Hoku Fuel Cells(TM) are trademarks of Hoku Scientific, Inc. Hoku Materials(TM) is a trademark of Hoku Materials, Inc. All rights reserved.
About Solarfun Power Holdings Co., Ltd.
Solarfun Power Holdings Co, Ltd. (NASDAQ: SOLF) manufactures both PV cells and PV modules, provides PV cell processing services to convert silicon wafers into PV cells, and supplies solar system integration services in China. Solarfun produces both monocrystalline and multicrystalline silicon cells and modules, and manufactures 100% of its modules with in-house produced PV cells. Solarfun sells its products both through third-party distributors, OEM manufacturers and directly to system integrators. Solarfun was founded in 2004 and its products have been certified to TUV and UL safety and quality standards. For more information visit www.solarfun.com.cn.
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU), established to manufacture and sell polysilicon for the solar market, and Solarfun Power Hong Kong Limited, a subsidiary of Solarfun Power Holdings Co., Ltd. (NASDAQ: SOLF), an established manufacturer of both photovoltaic (PV) cells and modules in China, today announced that they have amended their polysilicon supply contract to increase the term of the contract from eight to ten years. Total amounts that may be payable to Hoku Materials under the contract have increased from up to approximately $306 million for the eight year contract, to up to approximately $384 million for the amended ten year contract. Hoku Materials and Solarfun also agreed to a mutual right to terminate the supply agreement if Hoku Materials is unable to raise an aggregate of $75 million in financing for its polysilicon production plant by December 31, 2008 (including the $25 million that was already raised by Hoku Scientific's sale of common stock in February 2008). Solarfun may also terminate the agreement if Hoku Materials is unable to complete polysilicon shipment milestones and quality specifications by December 31, 2009.
"We're strengthening our relationship with Solarfun by extending the term from eight to ten years," said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. "A ten-year term allows us to better plan for our long-term operations, including the timing of future product sales and plant expansions. Adding the financing milestone gives each company the flexibility to terminate the contract if Hoku is ultimately unable to finance the completion of the plant. This makes sense for both companies, as it would be impossible to honor a long-term purchase and supply commitment if the plant is ultimately not built."
"We are pleased with the amendment of our contract with Hoku," said Solarfun's chief executive officer, Harold Hoskens. "We look forward to their timely delivery of polysilicon as scheduled by the 2nd half of 2009."
About Hoku Scientific, Inc.
Hoku Scientific, Inc. (NASDAQ: HOKU) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar is a provider of turnkey photovoltaic systems in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells. For more information visit www.hokuscientific.com.
Hoku® and Hoku Scientific® are registered trademarks and Hoku Solar(TM) and Hoku Fuel Cells(TM) are trademarks of Hoku Scientific, Inc. Hoku Materials(TM) is a trademark of Hoku Materials, Inc. All rights reserved.
About Solarfun Power Holdings Co., Ltd.
Solarfun Power Holdings Co, Ltd. (NASDAQ: SOLF) manufactures both PV cells and PV modules, provides PV cell processing services to convert silicon wafers into PV cells, and supplies solar system integration services in China. Solarfun produces both monocrystalline and multicrystalline silicon cells and modules, and manufactures 100% of its modules with in-house produced PV cells. Solarfun sells its products both through third-party distributors, OEM manufacturers and directly to system integrators. Solarfun was founded in 2004 and its products have been certified to TUV and UL safety and quality standards. For more information visit www.solarfun.com.cn.
Canadian Solar Reports First Quarter 2008 Results
Q108 Results
-- Q108 net revenues of $171.2 million, a 34% increase over Q407 net revenues of $127.5 million -- Q108 net income per diluted share of $0.61, compared to Q407 net income per diluted share of $0.21
-- Q108 shipments of 41.8MW, compared to Q407 shipments of 37.8MW 2008 Outlook and Developments
-- Reiterating full year 2008 net revenue guidance of $650-$750 million on shipments of 200-220MW, excluding e-Module shipments.
-- Production of e-Modules, a medium power module product using 100% upgraded metallurgical grade (UMG) silicon, began in March and shipments started in May.
-- Phase Two of the solar cell plant on track with the installation of an additional 150MW of annual nameplate cell capacity starting in May
-- Phase One of our ingot and wafer plant in Luoyang on track with installation of 60MW annual nameplate wafer capacity starting in May
JIANGSU, China, May 13 /Xinhua-PRNewswire/ -- Canadian Solar Inc. ("theCompany," "CSI" or "we") (Nasdaq: CSIQ) today reported its preliminary unaudited US GAAP financial information for the first quarter ended March31, 2008.
Net revenues for the quarter were $171.2 million (including $2.2million of silicon material sales), compared to net revenues of $17.5million for the first quarter of 2007 (including $2.8 million of silicon materials sales) and $127.5 million for the fourth quarter of 2007(including $2.4 million of silicon materials sales). Net income for the quarter was $19.0 million, or $0.61 per diluted share, compared to a netloss of $3.9 million, or $0.14 per diluted share, for the first quarter of2007 and net income of $5.9 million, or $0.21 per diluted share, for the fourth quarter of 2007. If share-based compensation expenses of $2.2million were excluded, non-GAAP net income for the quarter would have been$21.2 million, or $0.65 per diluted share.
Dr. Shawn Qu, Chairman and CEO of CSI, commented: "I am very pleased with our first quarter results and proud to say that our team has now achieved four consecutive quarters of revenue growth and profit margin improvement. Our impressive performance in the first quarter was due to aresult of robust market demand for our products, strong pricing, effective management of foreign exchange exposure, strong operational execution of our flexible vertical integration business model, and our balanced supply strategy, which allowed us to increase our product delivery despite ageneral market shortage of silicon materials. In Q1, we significantly increased our internal solar cell production, which resulted in a positive impact on our bottom line. Our new Changshu solar module plant was completed on schedule during the quarter. This gave us the ability to quickly increase shipments in March following the severe weather conditions earlier in the year. Deliveries from most of our strategic suppliers are now generally on track."
Bing Zhu, CFO of CSI, noted: "We delivered on our promise to improve our gross margins and we were able to increase diluted earnings per shareby close to 200% compared with Q4 2007 due to our disciplined financial management and continued operational efficiency. The significant upside to our bottom line was mainly contributed by three factors -- strong pricing, the strong Euro vs. USD, and our internal cost cutting. Although the large foreign exchange gain is likely a one-time event, we believe that the other factors will remain positive, and will, therefore, help us maintain asimilar level of profitability going forward."
Revenue by Geography (US $ millions)
Q108 Q407 Q107
Region Revenue % Revenue % Revenue %
Europe 167.6 97.9% 124.1 97.3% 12.1 69.4%
Asia 2.4 1.4% 2.9 2.3% 3.3 18.9%
Americas 1.2 0.7% 0.5 0.4% 2.1 11.7%
Total Net 171.2 100% 127.5 100% 17.5 100%
Revenue
Note: Asian revenue included $2.2 million of silicon materials sales in the first quarter of 2008 and $2.4 million of silicon materials sales in the fourth quarter of 2007.
Recent Developments
We commenced commercial production of e-Modules, a cost-effective medium power solar module product using 100% upgraded metallurgical grade(UMG) silicon, in March. We converted one of our solar cell lines and dedicated it to UMG cells in early April and ramped up to full production shortly thereafter. We have produced approximately one MW of UMG cells over the past four weeks. We believe that we have so far achieved the technical and economic parameters which we preset for the ramp up phase. Delivery of e-Modules to our European and US customers started in early May. We believe that we are on track to achieve our prior estimate of shipping 30-40MW of e-Modules in 2008.
Outlook
Dr. Qu continued: "We also believe that we are on track to achieve our prior guidance of shipping 200 -220MW of regular solar modules in 2008, not including shipments of e-Modules, and to continue our record of quarter over quarter revenue growth. We intend to continue our long-term and proven supply chain strategy of combining internal solar wafer and cell production with direct purchasing from a select number of long-term strategic wafer and cell suppliers. We expect that many of the positive market trends that we witnessed in Q1 will continue for the rest of the year, and believe that the gross margin that we were able to achieve in Q1 bodes well for our ability to achieve our 13% - 15% gross margin target for the year."
Net revenue for Q208 is expected to be in the range of $185 - $190 million, with non-GAAP net income, determined by excluding share based compensation expenses, expected to be in the range of $17 - $18 million. Shipments for Q208 are expected to be approximately 45MW, including some tolling business.
Looking ahead to 2009, if all of our long-term supply contracts are fully implemented, we will have access to 200MW of regular polysilicon and wafers. Based on our strong position as a worldwide photovoltaic solar module supplier and the expansion plans of our strategic partners, we believe that we should be able to secure an additional 200MW of regular polysilicon and wafers, thereby enabling us to produce approximately 400MW of regular photovoltaic solar modules. In addition, we expect to produce100 - 150MW of UMG silicon products in 2009.
-- Q108 net revenues of $171.2 million, a 34% increase over Q407 net revenues of $127.5 million -- Q108 net income per diluted share of $0.61, compared to Q407 net income per diluted share of $0.21
-- Q108 shipments of 41.8MW, compared to Q407 shipments of 37.8MW 2008 Outlook and Developments
-- Reiterating full year 2008 net revenue guidance of $650-$750 million on shipments of 200-220MW, excluding e-Module shipments.
-- Production of e-Modules, a medium power module product using 100% upgraded metallurgical grade (UMG) silicon, began in March and shipments started in May.
-- Phase Two of the solar cell plant on track with the installation of an additional 150MW of annual nameplate cell capacity starting in May
-- Phase One of our ingot and wafer plant in Luoyang on track with installation of 60MW annual nameplate wafer capacity starting in May
JIANGSU, China, May 13 /Xinhua-PRNewswire/ -- Canadian Solar Inc. ("theCompany," "CSI" or "we") (Nasdaq: CSIQ) today reported its preliminary unaudited US GAAP financial information for the first quarter ended March31, 2008.
Net revenues for the quarter were $171.2 million (including $2.2million of silicon material sales), compared to net revenues of $17.5million for the first quarter of 2007 (including $2.8 million of silicon materials sales) and $127.5 million for the fourth quarter of 2007(including $2.4 million of silicon materials sales). Net income for the quarter was $19.0 million, or $0.61 per diluted share, compared to a netloss of $3.9 million, or $0.14 per diluted share, for the first quarter of2007 and net income of $5.9 million, or $0.21 per diluted share, for the fourth quarter of 2007. If share-based compensation expenses of $2.2million were excluded, non-GAAP net income for the quarter would have been$21.2 million, or $0.65 per diluted share.
Dr. Shawn Qu, Chairman and CEO of CSI, commented: "I am very pleased with our first quarter results and proud to say that our team has now achieved four consecutive quarters of revenue growth and profit margin improvement. Our impressive performance in the first quarter was due to aresult of robust market demand for our products, strong pricing, effective management of foreign exchange exposure, strong operational execution of our flexible vertical integration business model, and our balanced supply strategy, which allowed us to increase our product delivery despite ageneral market shortage of silicon materials. In Q1, we significantly increased our internal solar cell production, which resulted in a positive impact on our bottom line. Our new Changshu solar module plant was completed on schedule during the quarter. This gave us the ability to quickly increase shipments in March following the severe weather conditions earlier in the year. Deliveries from most of our strategic suppliers are now generally on track."
Bing Zhu, CFO of CSI, noted: "We delivered on our promise to improve our gross margins and we were able to increase diluted earnings per shareby close to 200% compared with Q4 2007 due to our disciplined financial management and continued operational efficiency. The significant upside to our bottom line was mainly contributed by three factors -- strong pricing, the strong Euro vs. USD, and our internal cost cutting. Although the large foreign exchange gain is likely a one-time event, we believe that the other factors will remain positive, and will, therefore, help us maintain asimilar level of profitability going forward."
Revenue by Geography (US $ millions)
Q108 Q407 Q107
Region Revenue % Revenue % Revenue %
Europe 167.6 97.9% 124.1 97.3% 12.1 69.4%
Asia 2.4 1.4% 2.9 2.3% 3.3 18.9%
Americas 1.2 0.7% 0.5 0.4% 2.1 11.7%
Total Net 171.2 100% 127.5 100% 17.5 100%
Revenue
Note: Asian revenue included $2.2 million of silicon materials sales in the first quarter of 2008 and $2.4 million of silicon materials sales in the fourth quarter of 2007.
Recent Developments
We commenced commercial production of e-Modules, a cost-effective medium power solar module product using 100% upgraded metallurgical grade(UMG) silicon, in March. We converted one of our solar cell lines and dedicated it to UMG cells in early April and ramped up to full production shortly thereafter. We have produced approximately one MW of UMG cells over the past four weeks. We believe that we have so far achieved the technical and economic parameters which we preset for the ramp up phase. Delivery of e-Modules to our European and US customers started in early May. We believe that we are on track to achieve our prior estimate of shipping 30-40MW of e-Modules in 2008.
Outlook
Dr. Qu continued: "We also believe that we are on track to achieve our prior guidance of shipping 200 -220MW of regular solar modules in 2008, not including shipments of e-Modules, and to continue our record of quarter over quarter revenue growth. We intend to continue our long-term and proven supply chain strategy of combining internal solar wafer and cell production with direct purchasing from a select number of long-term strategic wafer and cell suppliers. We expect that many of the positive market trends that we witnessed in Q1 will continue for the rest of the year, and believe that the gross margin that we were able to achieve in Q1 bodes well for our ability to achieve our 13% - 15% gross margin target for the year."
Net revenue for Q208 is expected to be in the range of $185 - $190 million, with non-GAAP net income, determined by excluding share based compensation expenses, expected to be in the range of $17 - $18 million. Shipments for Q208 are expected to be approximately 45MW, including some tolling business.
Looking ahead to 2009, if all of our long-term supply contracts are fully implemented, we will have access to 200MW of regular polysilicon and wafers. Based on our strong position as a worldwide photovoltaic solar module supplier and the expansion plans of our strategic partners, we believe that we should be able to secure an additional 200MW of regular polysilicon and wafers, thereby enabling us to produce approximately 400MW of regular photovoltaic solar modules. In addition, we expect to produce100 - 150MW of UMG silicon products in 2009.
China to issue preferential policy for solar power development
Shanghai. May 12. INTERFAX-CHINA - The Chinese government will soon release a new preferential policy designed to support the development of domestic solar power projects, and is currently in the final stages of deciding how best to support the industry, a senior government researcher revealed at an industry conference held in Shanghai last Friday.
Hoku and Suntech Announce Amended Polysilicon Supply Contract
Term Fixed at 10 Years; Financing Deadline Extended to December 31, 2008
May 12, 2008: 05:46 PM EST
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU), established to manufacture and sell polysilicon for the solar market, and Suntech Power Holdings Co., Ltd. (NYSE: STP), one of the world's leading manufacturers of photovoltaic (PV) cells and modules, today announced that they have amended their polysilicon supply contract to confirm the ten-year term of the contract, which was previously subject to a mutual right for either party to unilaterally reduce the term to seven years. In addition, pursuant to the amendment, Hoku Materials has been granted a right of first refusal to deliver all or any portion of the polysilicon in the form of wafers on commercial terms that are no less favorable to Suntech than it would otherwise be able to obtain. Total amounts that may be payable to Hoku Materials under the ten-year term of the contract are approximately $678 million, plus amounts payable for excess shipments that may be delivered in calendar year 2009.
Suntech and Hoku Materials further agreed to extend the date when either party may terminate the supply agreement if Hoku Materials is unable to complete the financing for its polysilicon production plant until December 31, 2008, and to reduce the financing milestone to $75 million, including the $25 million that was already raised by Hoku Scientific's sale of common stock in February 2008. Prior to the amendment, either Hoku Materials or Suntech had the right to terminate the supply agreement if Hoku Materials was unable to secure an aggregate of $100 million on or before May 31, 2008, to finance the procurement and construction of its planned polysilicon plant in Pocatello, Idaho.
Suntech also agreed to use its best efforts to obtain trichlorosilane, or TCS, in 2008 and 2009 for Hoku Materials's use at its production facility. Hoku Materials plans to build on-site TCS production facilities as part of its polysilicon plant, which are expected to be complete in 2009; however, until Hoku Materials's TCS plant is complete, TCS from a third party will enable the commencement of production faster than otherwise possible. If Suntech is able to obtain TCS for Hoku Materials, then Hoku Materials will allocate to Suntech additional polysilicon production output in 2009 that is in excess of Hoku Materials's pre-existing 2009 customer commitments.
"These amendments reflect our mutual commitment to strengthening the long-term relationship between Hoku and Suntech," said Dustin Shindo, Chairman and Chief Executive Officer of Hoku Scientific. "Locking-in the term at 10 years gives us greater certainty in planning our long-term operations, while Suntech's commitment to help us obtain TCS in 2008 and 2009 could improve our near-term operating results. Allowing us a right of first refusal to deliver wafers gives us the flexibility to vertically integrate a downstream process if we decide to pursue that strategy in the future."
Dr. Zhengrong Shi, Suntech's Chairman and Chief Executive Officer, stated, "Hoku has made tremendous progress over the past year, and we are pleased to strengthen our relationship with them. Confirming the term at ten years gives Suntech more visibility on long-term polysilicon pricing that will further our goal of achieving grid parity in solar."
About Hoku Scientific, Inc.
Hoku Scientific (NASDAQ: HOKU) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar markets, sells and installs turnkey photovoltaic systems in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells. For more information visit www.hokuscientific.com.
About Suntech
Suntech Power Holdings Co., Ltd. is a world leading solar energy company as measured by both production output and capacity of solar cells and modules. Suntech is passionate about improving the environment we live in and dedicated to developing advanced solar solutions that enable sustainable development. Suntech designs, develops, manufactures, and markets a variety of high quality, cost effective and environmentally friendly solar products for electric power applications in the residential, commercial, industrial, and public utility sectors. Suntech offers one of the broadest ranges of building integrated photovoltaic (BIPV) products under the MSK Solar Design Line(TM). Suntech has sales offices worldwide and is a market share leader in key global solar markets. For more information, please visit http://www.suntech-power.com.
May 12, 2008: 05:46 PM EST
Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU), established to manufacture and sell polysilicon for the solar market, and Suntech Power Holdings Co., Ltd. (NYSE: STP), one of the world's leading manufacturers of photovoltaic (PV) cells and modules, today announced that they have amended their polysilicon supply contract to confirm the ten-year term of the contract, which was previously subject to a mutual right for either party to unilaterally reduce the term to seven years. In addition, pursuant to the amendment, Hoku Materials has been granted a right of first refusal to deliver all or any portion of the polysilicon in the form of wafers on commercial terms that are no less favorable to Suntech than it would otherwise be able to obtain. Total amounts that may be payable to Hoku Materials under the ten-year term of the contract are approximately $678 million, plus amounts payable for excess shipments that may be delivered in calendar year 2009.
Suntech and Hoku Materials further agreed to extend the date when either party may terminate the supply agreement if Hoku Materials is unable to complete the financing for its polysilicon production plant until December 31, 2008, and to reduce the financing milestone to $75 million, including the $25 million that was already raised by Hoku Scientific's sale of common stock in February 2008. Prior to the amendment, either Hoku Materials or Suntech had the right to terminate the supply agreement if Hoku Materials was unable to secure an aggregate of $100 million on or before May 31, 2008, to finance the procurement and construction of its planned polysilicon plant in Pocatello, Idaho.
Suntech also agreed to use its best efforts to obtain trichlorosilane, or TCS, in 2008 and 2009 for Hoku Materials's use at its production facility. Hoku Materials plans to build on-site TCS production facilities as part of its polysilicon plant, which are expected to be complete in 2009; however, until Hoku Materials's TCS plant is complete, TCS from a third party will enable the commencement of production faster than otherwise possible. If Suntech is able to obtain TCS for Hoku Materials, then Hoku Materials will allocate to Suntech additional polysilicon production output in 2009 that is in excess of Hoku Materials's pre-existing 2009 customer commitments.
"These amendments reflect our mutual commitment to strengthening the long-term relationship between Hoku and Suntech," said Dustin Shindo, Chairman and Chief Executive Officer of Hoku Scientific. "Locking-in the term at 10 years gives us greater certainty in planning our long-term operations, while Suntech's commitment to help us obtain TCS in 2008 and 2009 could improve our near-term operating results. Allowing us a right of first refusal to deliver wafers gives us the flexibility to vertically integrate a downstream process if we decide to pursue that strategy in the future."
Dr. Zhengrong Shi, Suntech's Chairman and Chief Executive Officer, stated, "Hoku has made tremendous progress over the past year, and we are pleased to strengthen our relationship with them. Confirming the term at ten years gives Suntech more visibility on long-term polysilicon pricing that will further our goal of achieving grid parity in solar."
About Hoku Scientific, Inc.
Hoku Scientific (NASDAQ: HOKU) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar markets, sells and installs turnkey photovoltaic systems in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells. For more information visit www.hokuscientific.com.
About Suntech
Suntech Power Holdings Co., Ltd. is a world leading solar energy company as measured by both production output and capacity of solar cells and modules. Suntech is passionate about improving the environment we live in and dedicated to developing advanced solar solutions that enable sustainable development. Suntech designs, develops, manufactures, and markets a variety of high quality, cost effective and environmentally friendly solar products for electric power applications in the residential, commercial, industrial, and public utility sectors. Suntech offers one of the broadest ranges of building integrated photovoltaic (BIPV) products under the MSK Solar Design Line(TM). Suntech has sales offices worldwide and is a market share leader in key global solar markets. For more information, please visit http://www.suntech-power.com.
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