29 August 2008
ET Solar Group Corp has teamed with the Wattner Group from Germany to supply and install 50MW worth of solar projects in Southern Europe over the next 5 years. The contract is said to be worth €200 million to ET Solar and will use approximately 12,000 PV modules.
"Wattner opted for ET Solar because we possess the unique combination of profound manufacturing experience and in-depth EPC knowledge (Engineering- Procurement-Construction). The cooperation with investment partners such as Wattner is key for our development and expansion plans in international markets," said Xinghua Wang, Chairman & Chief Executive Officer of ET Solar.
The projects will be handled by ET Solar's subsidiary, ET Solutions AG.
Saturday, August 30, 2008
DC Chemical wins $749 mln China polysilicon order
SEOUL, Aug 29 (Reuters) - South Korea's DC Chemical Co said on Friday that it had secured a polysilicon order worth 813.3 billion won ($748.6 million) from China's Wuxi Suntech Power Co Ltd.
The contract period is between 2010 and the end of 2016, DC Chemical said in a disclosure to the Korea Exchange.
DC Chemical earlier on Friday announced a 200 billion won Japanese order for polysilicon, a material which is used for computer chips and converting sunlight into electricity inside solar cells.
The contract period is between 2010 and the end of 2016, DC Chemical said in a disclosure to the Korea Exchange.
DC Chemical earlier on Friday announced a 200 billion won Japanese order for polysilicon, a material which is used for computer chips and converting sunlight into electricity inside solar cells.
LDK Signs Seven-Year Wafer Supply Agreement With Hyundai Heavy Industries Co., Ltd.
XINYU CITY, China and SUNNYVALE, Calif., Aug 29, 2008 /PRNewswire via COMTEX/ -- XINYU CITY, China and SUNNYVALE, Calif., Aug. 29 /PRNewswire-FirstCall/ -- LDK Solar Co., Ltd ("LDK Solar")(NYSE: LDK), a leading manufacturer of solar wafers, today announced that it has signed a seven-year contract to supply multicrystalline solar wafers to Republic of Korea-based Hyundai Heavy Industries Co., Ltd (HHI).
Under the terms of the agreement, LDK Solar will deliver approximately 440 MW of multicrystalline silicon solar wafers to Hyundai Heavy Industries Co., Ltd over a seven-year period, commencing in 2009 and extending through 2015. Hyundai Heavy Industries Co., Ltd will make a down payment representing a portion of the contract value to LDK Solar.
"We are pleased to have entered into an additional agreement with Hyundai Heavy Industries Co., Ltd. and build upon our partnership," stated Mr. Xiaofeng Peng, Chairman and CEO of LDK Solar. "We continue to support HHI as they expand their presence in the solar markets."
"As we continue to grow our solar business and meet the growing demand for our products in Korea and globally, we are excited to strengthen our long-term wafer supply pipeline by reaching this agreement to secure additional high-quality wafers from LDK Solar," commented Kwon-Tae Kim, HHI's Executive Vice President.
About LDK Solar
LDK Solar Co., Ltd. is a leading manufacturer of solar wafers, which are the principal raw material used to produce solar cells. LDK Solar sells wafers globally to manufacturers of photovoltaic products, including solar cells and solar modules. In addition, LDK Solar provides wafer processing services to solar cell and module manufacturers. LDK Solar's headquarters and manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province in the People's Republic of China. Its office in the United States is located in Sunnyvale, California.
About Hyundai Heavy Industries Co., Ltd.
Hyundai Heavy Industries (HHI) is an integrated heavy industries company with six divisions such as shipbuilding and electro electric systems, and combines all of HHI's interests in renewable energies like solar, wind, electric vehicles for low carbon transport, combined gas-fired power generation, and distributed energy for emerging markets. HHI's solar business office and factory are located in Eumseong, Korea, and its headquarters and most of the facilities in Ulsan city, Korea.
Under the terms of the agreement, LDK Solar will deliver approximately 440 MW of multicrystalline silicon solar wafers to Hyundai Heavy Industries Co., Ltd over a seven-year period, commencing in 2009 and extending through 2015. Hyundai Heavy Industries Co., Ltd will make a down payment representing a portion of the contract value to LDK Solar.
"We are pleased to have entered into an additional agreement with Hyundai Heavy Industries Co., Ltd. and build upon our partnership," stated Mr. Xiaofeng Peng, Chairman and CEO of LDK Solar. "We continue to support HHI as they expand their presence in the solar markets."
"As we continue to grow our solar business and meet the growing demand for our products in Korea and globally, we are excited to strengthen our long-term wafer supply pipeline by reaching this agreement to secure additional high-quality wafers from LDK Solar," commented Kwon-Tae Kim, HHI's Executive Vice President.
About LDK Solar
LDK Solar Co., Ltd. is a leading manufacturer of solar wafers, which are the principal raw material used to produce solar cells. LDK Solar sells wafers globally to manufacturers of photovoltaic products, including solar cells and solar modules. In addition, LDK Solar provides wafer processing services to solar cell and module manufacturers. LDK Solar's headquarters and manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province in the People's Republic of China. Its office in the United States is located in Sunnyvale, California.
About Hyundai Heavy Industries Co., Ltd.
Hyundai Heavy Industries (HHI) is an integrated heavy industries company with six divisions such as shipbuilding and electro electric systems, and combines all of HHI's interests in renewable energies like solar, wind, electric vehicles for low carbon transport, combined gas-fired power generation, and distributed energy for emerging markets. HHI's solar business office and factory are located in Eumseong, Korea, and its headquarters and most of the facilities in Ulsan city, Korea.
LDK Solar Awards $220M Contract to Applied Materials for Precision Wafering Systems to Support Production Expansion
LDK Solar Co., Ltd, a leading manufacturer of solar wafers, awarded a US$220 million contract to Applied Materials, Inc. to provide precision wafering systems to support its next phase of production expansion. The systems are scheduled to begin shipping to LDK Solar's facility in Xinyu, PRC, in early 2009, and will support LDK Solar's previously announced plans to expand to 3.2GW annualized wafer capacity in 2010.
"We believe that Applied's state-of-the-art wafering systems, including its HCT wire saws and squarers, are the best choice to help us scale up capacity to meet the expanding global demand for wafers," stated Mr. Xiaofeng Peng, Chairman and CEO of LDK Solar. "We have used HCT wire saws since the beginning of our manufacturing operations in 2006, and they have continued to demonstrate the performance necessary to deliver high-quality, cost-effective wafers to our customers."
"We are very pleased to be selected by LDK Solar for this milestone agreement -- the largest contract ever awarded for wafering systems," said Stefan Schneeberger, vice president and general manager of Applied's Precision Wafer Systems division. "LDK Solar is known for its advanced wafer production capability and Applied Materials is committed to providing LDK Solar with the leading-edge technology to meet its most critical performance requirements."
About LDK Solar (NYSE: LDK)
LDK Solar Co., Ltd. is a leading manufacturer of solar wafers, which are the principal raw material used to produce solar cells. LDK Solar sells wafers globally to manufacturers of photovoltaic products, including solar cells and solar modules. In addition, LDK Solar provides wafer processing services to solar cell and module manufacturers. LDK Solar's headquarters and manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province in the People's Republic of China. Its office in the United States is located in Sunnyvale, California.
About Applied Materials, Inc. (Nasdaq: AMAT)
Applied Materials, Inc. (Nasdaq: AMAT) is the global leader in Nanomanufacturing Technology(TM) solutions with a broad portfolio of innovative equipment, service and software products for the fabrication of semiconductor chips, flat panel displays, solar photovoltaic cells, flexible electronics and energy efficient glass. Applied Materials applies Nanomanufacturing Technology to improve the way people live. Learn more at http://www.appliedmaterials.com.
"We believe that Applied's state-of-the-art wafering systems, including its HCT wire saws and squarers, are the best choice to help us scale up capacity to meet the expanding global demand for wafers," stated Mr. Xiaofeng Peng, Chairman and CEO of LDK Solar. "We have used HCT wire saws since the beginning of our manufacturing operations in 2006, and they have continued to demonstrate the performance necessary to deliver high-quality, cost-effective wafers to our customers."
"We are very pleased to be selected by LDK Solar for this milestone agreement -- the largest contract ever awarded for wafering systems," said Stefan Schneeberger, vice president and general manager of Applied's Precision Wafer Systems division. "LDK Solar is known for its advanced wafer production capability and Applied Materials is committed to providing LDK Solar with the leading-edge technology to meet its most critical performance requirements."
About LDK Solar (NYSE: LDK)
LDK Solar Co., Ltd. is a leading manufacturer of solar wafers, which are the principal raw material used to produce solar cells. LDK Solar sells wafers globally to manufacturers of photovoltaic products, including solar cells and solar modules. In addition, LDK Solar provides wafer processing services to solar cell and module manufacturers. LDK Solar's headquarters and manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province in the People's Republic of China. Its office in the United States is located in Sunnyvale, California.
About Applied Materials, Inc. (Nasdaq: AMAT)
Applied Materials, Inc. (Nasdaq: AMAT) is the global leader in Nanomanufacturing Technology(TM) solutions with a broad portfolio of innovative equipment, service and software products for the fabrication of semiconductor chips, flat panel displays, solar photovoltaic cells, flexible electronics and energy efficient glass. Applied Materials applies Nanomanufacturing Technology to improve the way people live. Learn more at http://www.appliedmaterials.com.
Yingli to construct solar plant in Beijing
Thursday, August 28, 2008
BAODING, CHINA: Yingli Green Energy Holding Co. Ltd, one of the world's leading vertically integrated photovoltaic product manufacturers, has entered into a framework agreement with the local government of a county in Beijing regarding the proposed construction of a 10MW solar power plant.
Under the framework agreement, a wholly-owned subsidiary of Yingli Green Energy and an entity controlled by the county government would establish a new company to construct the plant. Subject to further negotiations, the construction of the project would be expected to begin in the second half of 2009.
Besides the further negotiations, governmental approvals relating to, among other things, project planning, connection to the electricity transmission grid and the feed-in tariff are expected to be required and therefore no assurance can be given that the project will proceed as currently contemplated or at all.
"We are excited about this opportunity to construct an on-grid solar power plant in Beijing, which would be the first solar power plant we construct and operate," commented Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. "We believe our participation in this project is in line with our strategy of expanding into downstream applications of PV technology and will further strengthen our vertical integration business model."
Yingli Green Energy Holding Company Limited is one of the world's leading vertically integrated PV product manufacturers. 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 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.
BAODING, CHINA: Yingli Green Energy Holding Co. Ltd, one of the world's leading vertically integrated photovoltaic product manufacturers, has entered into a framework agreement with the local government of a county in Beijing regarding the proposed construction of a 10MW solar power plant.
Under the framework agreement, a wholly-owned subsidiary of Yingli Green Energy and an entity controlled by the county government would establish a new company to construct the plant. Subject to further negotiations, the construction of the project would be expected to begin in the second half of 2009.
Besides the further negotiations, governmental approvals relating to, among other things, project planning, connection to the electricity transmission grid and the feed-in tariff are expected to be required and therefore no assurance can be given that the project will proceed as currently contemplated or at all.
"We are excited about this opportunity to construct an on-grid solar power plant in Beijing, which would be the first solar power plant we construct and operate," commented Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. "We believe our participation in this project is in line with our strategy of expanding into downstream applications of PV technology and will further strengthen our vertical integration business model."
Yingli Green Energy Holding Company Limited is one of the world's leading vertically integrated PV product manufacturers. 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 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.
Suntech to buy silicon wafers from GCL Silicon
SIOUX FALLS, S.D. - Chinese solar cell maker Suntech Power Holdings Co. Ltd. said Wednesday it has signed a five-year agreement to buy silicon wafers from GCL Silicon Technology Holdings Inc.
Under the agreement, GCL Silicon will supply Suntech with 9,420 metric tons of polysilicon and 1.1 gigawatts of silicon wafers from 2008 to 2012.
Financial terms were not disclosed.
"These agreements with GCL Silicon will greatly strengthen our silicon pipeline and support our capacity and production expansion over the next five years," Zhengrong Shi, Suntech's chairman and chief executive, said in a statement.
GCL Silicon is based in China's Jiangsu Province.
Under the agreement, GCL Silicon will supply Suntech with 9,420 metric tons of polysilicon and 1.1 gigawatts of silicon wafers from 2008 to 2012.
Financial terms were not disclosed.
"These agreements with GCL Silicon will greatly strengthen our silicon pipeline and support our capacity and production expansion over the next five years," Zhengrong Shi, Suntech's chairman and chief executive, said in a statement.
GCL Silicon is based in China's Jiangsu Province.
Solarfun Reports Second Quarter 2008 Results
August 27, 2008 7:48 AM EDT
SHANGHAI, China--(BUSINESS WIRE)--Solarfun Power Holdings Co. , Ltd. ("Solarfun" or "the Company") (NASDAQ: SOLF), an established vertically integrated manufacturer of silicon ingots and photovoltaic (PV) cells and modules in China, today reported its unaudited financial results for the second quarter ended June 30, 2008.
2008 SECOND QUARTER RESULTS
-- Net revenue was RMB 1.35 billion (US$ 197.1 million), an increase of 12.7% from the first quarter of 2008, and 192.2% from the second quarter of 2007.
-- PV module shipments reached 43.1 MW, an increase of 162% from the second quarter of 2007. Solarfun also shipped 5 MW of cells with specification levels that are different than the
Company's mainstream business.
-- Average selling price ("ASP") improved to US$4.17 from US$4.07 in the first quarter of 2008. Business in Europe remained robust, with Germany, Spain and France accounting for 56%, 33%
and 5% of net revenues, respectively.
-- Gross profit was RMB 185.6 million (US$ 27.1 million), an increase of 163.7% from the second quarter of 2007.
-- Gross margin decreased to 13.7% from 15.8% in the first quarter of 2008. The figure was in line with the Company's guidance and was primarily due to higher polysilicon and wafer
costs.
-- Operating profit was RMB 116.4 million (US$ 17.0 million), an increase of 306.6% from the second quarter of 2007. Operating margins decreased to 8.6% from 11.8% in the first quarter of
2008 as the Company returned to more normal levels of spending to support growth, including a nearly RMB 2.9 million sequential increase in research and development expenses.
-- Interest expense rose over RMB 25.5 million (US$ 3.7 million) from the second quarter of 2007 to RMB 28.1 million (US$ 4.1 million) due to increased bank borrowings and the Company's convertible senior notes offering earlier in the year.
-- Currency gain was RMB 4.1 million (US$ 0.6 million) as a result of the appreciation of the RMB relative to the U.S. dollar.
-- Net income was RMB 78.1 million (US$ 11.4 million), a 285.2% increase over the second quarter of 2007.
-- Earnings per basic ADS were RMB 1.62 (US$ 0.24).
Harold Hoskens, CEO of Solarfun, noted "We are pleased with the progress achieved during the second quarter as we continued to see healthy demand and firm pricing. The tight supply and higher costs for polysilicon and wafers constrained both our top and bottom line growth, and our gross margins. This is a temporary situation with visibility improving on both measures during the second half of 2008, most notably during the fourth quarter. A number of important initiatives were completed following the close of the quarter which position us for continued growth going forward."
FINANCIAL POSITION
As of June 30, 2008, the Company had cash and cash equivalents of RMB 557.7 million (US$ 81.3 million) and working capital of RMB 2.2 billion (US$ 322.7 million). Total bank borrowings were RMB 1.28 billion (US$ 186.8 million), remaining relatively constant with the levels of the first quarter of 2008. Subsequent to the end of the second quarter of 2008, the Company raised US$ 71.9 million in net proceeds from a sale of 5,421,093 ADSs pursuant to a sales agency agreement with Morgan Stanley & Co. Inc.
The Company continued to improve its working capital management with improved inventory and accounts receivable management. Net accounts receivable were RMB 442.2 million (US$ 64.5 million). Days Sales Outstanding (DSOs) continued to improve to 37 days, down from 41 days in the first quarter of 2008. Inventories of RMB 823.4 million (US$ 120 million) were relatively constant with last quarter and inventory turnover days improved to 63 days versus 104 days from the same period in 2007.
* Capital outlays during the second quarter totaled US$ 57.2 million, of which US$ 42.4 million was for capital expenditures and US$ 14.8 million was for pre-payments to suppliers.
SIGNIFICANT SECOND QUARTER EVENTS
-- Signed an 8-year, 1.2 gigwatt ("GW") contract for virgin polysilicon with GCL Silicon Technology.
-- Purchased the remaining 48% interest in Jiangsu Yangguang Solar (a silicon ingot producer) that the Company did not already own.
SUBSEQUENT EVENTS
Following the close of the second quarter of 2008, the Company made a number of announcements, including:
-- Completed and successfully initiated production on four new manufacturing lines, increasing nameplate capacity by 120 MW to 360 MW.
-- Began early stage operation of an expanding wire saw facility at the Company's manufacturing facility in Qidong.
-- Signed a 47 MW sales contract to supply PV modules to Schuco International KG between December 2008 and October 2009, with installations targeted for the Middle East and south-east Europe.
-- Signed a 30 MW sales contract to supply PV modules to Martifer Solar Sistemas Solares, a leading solar project developer, installer and producer in Europe, from January through
December 2009.
-- Concluded a letter-of-intent ("LOI") with Q-Cells AG for a three-year module supply agreement for the purchase by Q-Cells of no less than 100 MW of PV modules per annum using PV cells Q-Cells will provide from 2009 through 2011. The Company and Q-Cells intend to enter into an agreement to exchange technology to further enhance the development of highly
efficient and low cost PV modules.
BUSINESS OUTLOOK
Based on current operating trends and other conditions, the Company's outlook is as follows: For the remainder of 2008, management expects:
-- Continued strong demand. Based on contracted sales volume, guidance for 2008 shipments has been raised from 160-180 MW to 175-190 MW. In constant Euro terms (the currency in which the majority of the Company's sales are recorded) pricing is expected to be relatively stable for the remainder of the year.
-- Gross margins for the second half of 2008 are expected to improve from levels seen in the second quarter of 2008, although the Company expects that polysilicon and wafer pricing will continue to be high during the third quarter of 2008. Margin improvements from lower supply costs and other benefits related to greater vertical integration are expected to become more meaningful during the fourth quarter of 2008.
-- Operating expenses as a percent of revenues are expected to remain in the 5-6 % range.
-- Capital expenditures for the remainder of 2008 are anticipated to approach US$ 90 million, and an additional $70-$80 million for supplier prepayments and the LYG equity acquisition. Cash on hand and access to additional commercial debt is viewed as adequate to fund the Company's capital outlays for the remainder of 2008.
For the Full Year 2009, management expects:
-- Total shipments to rise 50% from the revised full-year guidance range of 175-190 MW for 2008. The Company has good visibility on 200 MW of contracted sales volume for 2009,
one-half of which is secured through signed contracts.
-- ASP's to decline 5-10% from the expected full-year 2008.
-- The Company's polysilicon and wafer needs are 100% secured, of which approximately two thirds are in the form of long-term contracts.
-- Through the reduction in polysilicon-related costs and the benefits of vertical integration, the Company foresees the potential to improve gross margins 500 basis points for full-year 2009.
-- Management's current projections call for a further 120 MW of integrated cell and module capacity expansion in 2009. A further 100MW of module capacity will be added and dedicated
to the Company's aforementioned arrangement with Q-Cells.
-- These projections assume constant currencies (Euro vs. US Dollar), management's ability to execute its vertical integration ramp, and to a lesser extent, dependence on raw material suppliers meeting contractual obligations for timely delivery.
Harold Hoskens concluded, "We are on track for a solid year of growth in 2008 and have positioned ourselves for meaningful progress in 2009. Although near-term supply constraints and higher costs persist, we see visibility for better conditions beginning in the fourth quarter of this year and further improvements throughout 2009. Demand is good. Our brand is growing worldwide. Customers recognize our low-cost and high quality manufacturing platform and are contracting their production needs with us. We are secure in our supply needs for next year and our vertical integration strategy will begin to show meaningful benefits starting in the final quarter of this year."
SHANGHAI, China--(BUSINESS WIRE)--Solarfun Power Holdings Co. , Ltd. ("Solarfun" or "the Company") (NASDAQ: SOLF), an established vertically integrated manufacturer of silicon ingots and photovoltaic (PV) cells and modules in China, today reported its unaudited financial results for the second quarter ended June 30, 2008.
2008 SECOND QUARTER RESULTS
-- Net revenue was RMB 1.35 billion (US$ 197.1 million), an increase of 12.7% from the first quarter of 2008, and 192.2% from the second quarter of 2007.
-- PV module shipments reached 43.1 MW, an increase of 162% from the second quarter of 2007. Solarfun also shipped 5 MW of cells with specification levels that are different than the
Company's mainstream business.
-- Average selling price ("ASP") improved to US$4.17 from US$4.07 in the first quarter of 2008. Business in Europe remained robust, with Germany, Spain and France accounting for 56%, 33%
and 5% of net revenues, respectively.
-- Gross profit was RMB 185.6 million (US$ 27.1 million), an increase of 163.7% from the second quarter of 2007.
-- Gross margin decreased to 13.7% from 15.8% in the first quarter of 2008. The figure was in line with the Company's guidance and was primarily due to higher polysilicon and wafer
costs.
-- Operating profit was RMB 116.4 million (US$ 17.0 million), an increase of 306.6% from the second quarter of 2007. Operating margins decreased to 8.6% from 11.8% in the first quarter of
2008 as the Company returned to more normal levels of spending to support growth, including a nearly RMB 2.9 million sequential increase in research and development expenses.
-- Interest expense rose over RMB 25.5 million (US$ 3.7 million) from the second quarter of 2007 to RMB 28.1 million (US$ 4.1 million) due to increased bank borrowings and the Company's convertible senior notes offering earlier in the year.
-- Currency gain was RMB 4.1 million (US$ 0.6 million) as a result of the appreciation of the RMB relative to the U.S. dollar.
-- Net income was RMB 78.1 million (US$ 11.4 million), a 285.2% increase over the second quarter of 2007.
-- Earnings per basic ADS were RMB 1.62 (US$ 0.24).
Harold Hoskens, CEO of Solarfun, noted "We are pleased with the progress achieved during the second quarter as we continued to see healthy demand and firm pricing. The tight supply and higher costs for polysilicon and wafers constrained both our top and bottom line growth, and our gross margins. This is a temporary situation with visibility improving on both measures during the second half of 2008, most notably during the fourth quarter. A number of important initiatives were completed following the close of the quarter which position us for continued growth going forward."
FINANCIAL POSITION
As of June 30, 2008, the Company had cash and cash equivalents of RMB 557.7 million (US$ 81.3 million) and working capital of RMB 2.2 billion (US$ 322.7 million). Total bank borrowings were RMB 1.28 billion (US$ 186.8 million), remaining relatively constant with the levels of the first quarter of 2008. Subsequent to the end of the second quarter of 2008, the Company raised US$ 71.9 million in net proceeds from a sale of 5,421,093 ADSs pursuant to a sales agency agreement with Morgan Stanley & Co. Inc.
The Company continued to improve its working capital management with improved inventory and accounts receivable management. Net accounts receivable were RMB 442.2 million (US$ 64.5 million). Days Sales Outstanding (DSOs) continued to improve to 37 days, down from 41 days in the first quarter of 2008. Inventories of RMB 823.4 million (US$ 120 million) were relatively constant with last quarter and inventory turnover days improved to 63 days versus 104 days from the same period in 2007.
* Capital outlays during the second quarter totaled US$ 57.2 million, of which US$ 42.4 million was for capital expenditures and US$ 14.8 million was for pre-payments to suppliers.
SIGNIFICANT SECOND QUARTER EVENTS
-- Signed an 8-year, 1.2 gigwatt ("GW") contract for virgin polysilicon with GCL Silicon Technology.
-- Purchased the remaining 48% interest in Jiangsu Yangguang Solar (a silicon ingot producer) that the Company did not already own.
SUBSEQUENT EVENTS
Following the close of the second quarter of 2008, the Company made a number of announcements, including:
-- Completed and successfully initiated production on four new manufacturing lines, increasing nameplate capacity by 120 MW to 360 MW.
-- Began early stage operation of an expanding wire saw facility at the Company's manufacturing facility in Qidong.
-- Signed a 47 MW sales contract to supply PV modules to Schuco International KG between December 2008 and October 2009, with installations targeted for the Middle East and south-east Europe.
-- Signed a 30 MW sales contract to supply PV modules to Martifer Solar Sistemas Solares, a leading solar project developer, installer and producer in Europe, from January through
December 2009.
-- Concluded a letter-of-intent ("LOI") with Q-Cells AG for a three-year module supply agreement for the purchase by Q-Cells of no less than 100 MW of PV modules per annum using PV cells Q-Cells will provide from 2009 through 2011. The Company and Q-Cells intend to enter into an agreement to exchange technology to further enhance the development of highly
efficient and low cost PV modules.
BUSINESS OUTLOOK
Based on current operating trends and other conditions, the Company's outlook is as follows: For the remainder of 2008, management expects:
-- Continued strong demand. Based on contracted sales volume, guidance for 2008 shipments has been raised from 160-180 MW to 175-190 MW. In constant Euro terms (the currency in which the majority of the Company's sales are recorded) pricing is expected to be relatively stable for the remainder of the year.
-- Gross margins for the second half of 2008 are expected to improve from levels seen in the second quarter of 2008, although the Company expects that polysilicon and wafer pricing will continue to be high during the third quarter of 2008. Margin improvements from lower supply costs and other benefits related to greater vertical integration are expected to become more meaningful during the fourth quarter of 2008.
-- Operating expenses as a percent of revenues are expected to remain in the 5-6 % range.
-- Capital expenditures for the remainder of 2008 are anticipated to approach US$ 90 million, and an additional $70-$80 million for supplier prepayments and the LYG equity acquisition. Cash on hand and access to additional commercial debt is viewed as adequate to fund the Company's capital outlays for the remainder of 2008.
For the Full Year 2009, management expects:
-- Total shipments to rise 50% from the revised full-year guidance range of 175-190 MW for 2008. The Company has good visibility on 200 MW of contracted sales volume for 2009,
one-half of which is secured through signed contracts.
-- ASP's to decline 5-10% from the expected full-year 2008.
-- The Company's polysilicon and wafer needs are 100% secured, of which approximately two thirds are in the form of long-term contracts.
-- Through the reduction in polysilicon-related costs and the benefits of vertical integration, the Company foresees the potential to improve gross margins 500 basis points for full-year 2009.
-- Management's current projections call for a further 120 MW of integrated cell and module capacity expansion in 2009. A further 100MW of module capacity will be added and dedicated
to the Company's aforementioned arrangement with Q-Cells.
-- These projections assume constant currencies (Euro vs. US Dollar), management's ability to execute its vertical integration ramp, and to a lesser extent, dependence on raw material suppliers meeting contractual obligations for timely delivery.
Harold Hoskens concluded, "We are on track for a solid year of growth in 2008 and have positioned ourselves for meaningful progress in 2009. Although near-term supply constraints and higher costs persist, we see visibility for better conditions beginning in the fourth quarter of this year and further improvements throughout 2009. Demand is good. Our brand is growing worldwide. Customers recognize our low-cost and high quality manufacturing platform and are contracting their production needs with us. We are secure in our supply needs for next year and our vertical integration strategy will begin to show meaningful benefits starting in the final quarter of this year."
Solarfun Signs Letter of Intent for Three Year Supply Agreement with Q-Cells
SHANGHAI, China, Aug 27, 2008 (BUSINESS WIRE) -- Solarfun Power Holdings Co., Ltd, an established vertically-integrated manufacturer of silicon ingots and photovoltaic ("PV") cells and modules in China, today announced that it has entered into a letter-of-intent for a three-year supply agreement with Q-Cells International, a 100% subsidiary of Q-Cells AG ("Q-Cells"), the world's largest independent manufacturer of solar cells.
Under the letter of intent, Q-Cells International intends to purchase from Solarfun a minimum of 100 MW of PV modules per annum using PV cells supplied by Q-Cells from 2009 through 2011. The modules shall be delivered according to Q-Cells design and specifications and used to serve Q-Cells International's rapidly growing systems businesses' requirements. In addition, both parties intend to complete an agreement whereby the companies will cooperate to further enhance the development of highly efficient and low cost PV solar modules.
Anton Milner, CEO of Q-Cells stated, "We are very pleased to establish this relationship with Solarfun which will support our growing needs for the rapidly expanding activities in Q-Cells International, in this case primarily outside of Europe. We aim to combine our high efficiency cells and Solarfun's competitive, flexible and high quality manufacturing base for solar modules to create high efficiency and cost effective module solutions for these systems. We believe that close cooperation between the two parties will provide each with opportunities to grow and compete effectively in the burgeoning field of renewable solar energy."
Solarfun CEO Harold Hoskens commented, "We believe this relationship is beneficial to both parties and provides a platform for further areas of cooperation. We are pleased that Q-Cells intends to choose us as a major module supplier with this sizeable commitment. Upon the expected entry into the contract, it will allow us to build additional scale, and leverage and enhance our corporate structure. We look forward to building further areas of cooperation and sharing process, product and application technology that could benefit both parties."
About Solarfun
Solarfun Power Holdings Co, Ltd. manufactures ingots and PV cells and modules and supplies solar system integration services in China. The Company produces both monocrystalline and multicrystalline silicon cells and modules, and manufactures the majority of its modules with in-house produced PV cells. Solarfun sells its products both through third-party distributors and directly to system integrators. The Company was founded in 2004 and its products have been certified to TUV and UL safety and quality standards. SOLF-G
http://www.solarfun.com.cn
About Q-Cells AG
Founded in 1999, Q-Cells AG is today the largest manufacturer of solar cells worldwide. In 2007, with some 1,800 employees, the company produced monocrystalline and multi-crystalline solar cells with a total performance of 389.2 megawatt peak and delivered them worldwide to manufacturers of solar modules. More than 200 scientists and engineers at Q-Cells are working on advancing the technology so as to achieve the objective of the company -- reducing photovoltaic costs quickly and on a sustained basis and making them competitive. In addition to the activities in its core business, from 2008 onwards several Q-Cells AG subsidiaries will be producing photovoltaic modules on the basis of various thin-film technologies. Q-Cells AG has branches in Hong Kong, China and Japan, is listed on the Frankfurt Stock Exchange (QCE; WKN555866) and included in the TecDAX, the German technology index.
Under the letter of intent, Q-Cells International intends to purchase from Solarfun a minimum of 100 MW of PV modules per annum using PV cells supplied by Q-Cells from 2009 through 2011. The modules shall be delivered according to Q-Cells design and specifications and used to serve Q-Cells International's rapidly growing systems businesses' requirements. In addition, both parties intend to complete an agreement whereby the companies will cooperate to further enhance the development of highly efficient and low cost PV solar modules.
Anton Milner, CEO of Q-Cells stated, "We are very pleased to establish this relationship with Solarfun which will support our growing needs for the rapidly expanding activities in Q-Cells International, in this case primarily outside of Europe. We aim to combine our high efficiency cells and Solarfun's competitive, flexible and high quality manufacturing base for solar modules to create high efficiency and cost effective module solutions for these systems. We believe that close cooperation between the two parties will provide each with opportunities to grow and compete effectively in the burgeoning field of renewable solar energy."
Solarfun CEO Harold Hoskens commented, "We believe this relationship is beneficial to both parties and provides a platform for further areas of cooperation. We are pleased that Q-Cells intends to choose us as a major module supplier with this sizeable commitment. Upon the expected entry into the contract, it will allow us to build additional scale, and leverage and enhance our corporate structure. We look forward to building further areas of cooperation and sharing process, product and application technology that could benefit both parties."
About Solarfun
Solarfun Power Holdings Co, Ltd. manufactures ingots and PV cells and modules and supplies solar system integration services in China. The Company produces both monocrystalline and multicrystalline silicon cells and modules, and manufactures the majority of its modules with in-house produced PV cells. Solarfun sells its products both through third-party distributors and directly to system integrators. The Company was founded in 2004 and its products have been certified to TUV and UL safety and quality standards. SOLF-G
http://www.solarfun.com.cn
About Q-Cells AG
Founded in 1999, Q-Cells AG is today the largest manufacturer of solar cells worldwide. In 2007, with some 1,800 employees, the company produced monocrystalline and multi-crystalline solar cells with a total performance of 389.2 megawatt peak and delivered them worldwide to manufacturers of solar modules. More than 200 scientists and engineers at Q-Cells are working on advancing the technology so as to achieve the objective of the company -- reducing photovoltaic costs quickly and on a sustained basis and making them competitive. In addition to the activities in its core business, from 2008 onwards several Q-Cells AG subsidiaries will be producing photovoltaic modules on the basis of various thin-film technologies. Q-Cells AG has branches in Hong Kong, China and Japan, is listed on the Frankfurt Stock Exchange (QCE; WKN555866) and included in the TecDAX, the German technology index.
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