SHANGHAI, China, Dec 02, 2008 (BUSINESS WIRE) -- Solarfun Power Holdings Co., Ltd. ("Solarfun" or "the Company") , a vertically integrated manufacturer of silicon ingots and photovoltaic (PV) cells and modules in China, today reported its unaudited financial results for the third quarter ended September 30, 2008.
2008 THIRD QUARTER RESULTS
-- Net revenue was RMB 1,275 million (US$187.8 million), an increase of 69.1% from the third quarter of 2007, but down 5.7% from the second quarter of 2008.
-- Results were influenced by a total non-cash provision of US$16.5 million for inventory revaluation (US$12.9 million) and expected losses on pre-payments. Provisions were necessary as a result of mark-to-market inventory valuations in a period of rapidly declining raw material costs and some low-quality materials determined to be unusable, as well as supply pre-payments that were determined to be "at risk" and likely to not be recoverable.
-- PV module shipments reached 41.8 MW, representing an increase of 53% from the third quarter of 2007, and a slight decline from 43.1 MW in the second quarter of 2008. The Company's ability to meet customer demand was curtailed by lack of polysilicon material delivery.
-- Average selling price ("ASP") continued to be robust at US$4.04, but declined, as expected, from US$4.17 in the second quarter of 2008. This was primarily due to the weakening Euro against the U.S. Dollar. Business continued to be centered in Europe, with Germany and Spain accounting for 53% and 24% of net revenue in this quarter, respectively.
-- Gross profit was RMB 46.1 million (US$6.8 million), down 61.6% from RMB17.7 million in the third quarter of 2007, and also down from US$27.3 million in the second quarter of 2008.
-- Gross margin was 3.6% and was negatively impacted by the aforementioned provisions, as well as polysilicon-related material costs that continued to remain high during the quarter. Without the provisions, gross margins from normal operations would have reached 12.4%, which would have been in-line with previously expressed expectations.
-- The operating loss was RMB 25.9 million (US$3.8 million). Before provisions, operating income was RMB 86.3 million (US$12.7 million), or 6.8% of total revenues. Selling expenses were RMB 20.2 million (US$3.0 million), which was below the second quarter of 2008 due to an adjustment in accrued commission expenses.
-- Interest expense declined nearly US$1 million from the second quarter of 2008 to RMB 21.6 million (US$3.2 million) due to a reduction in outstanding bank debts and lower interest rates from refinancing.
-- The total exchange rate gain was US$0.4 million. The Company recorded a RMB 30 million (US$4.4 million) currency loss largely as a result of the impact of the declining Euro against the U.S. dollar, but was able to more than offset this through its foreign exchange hedging program, which resulted in a RMB 32.8 million (US$4.8 million) gain.
-- The net loss was RMB 44.3 million (US$6.5 million). The loss per basic ADS was RMB 0.86 or US$0.13. Before provision adjustments, net income and earnings per basic ADS would have been US$8.3 million and US$0.16, respectively.
Harold Hoskens, CEO of Solarfun, commented, "The third quarter was quite challenging in some respects. The unexpected shortfall in polysilicon material supply was certainly disappointing. This constrained our short-term ability to grow volume and fulfill customer demand. Our financial results were also impacted by the inventory and pre-payment-related provisions. We felt it necessary in view of the rapidly declining costs for polysilicon-related raw materials to adjust our inventory valuations, as well as account for any "at risk" pre-payments. Although current global economic and financial conditions remain uncertain, and we are not immune to these factors, we are maintaining a high degree of optimism in our ability to compete and grow in what we believe is undeniably a burgeoning market in the long-term as renewable energy continues to grow in acceptance. These macro conditions have impacted, and will continue to impact, the demand and pricing for photovoltaic-based solar products. However, we believe that the rapidly declining costs for polysilicon, combined with our low-cost manufacturing base, increasingly vertically integrated production process, customer loyalty and financial stability, will allow us to weather this environment and emerge as a stronger and viable long term player.
FINANCIAL POSITION
As of September 30, 2008, the Company had cash and cash equivalents of RMB 511.4 million (US$75.3 million) and working capital of RMB 2.1 billion (US$310.2 million). Total bank borrowings were RMB 1.2 billion (US$177.3 million), which was down from the previous quarter. During the quarter, the Company raised US$71.9 million in net proceeds from the sale of 5,421,093 ADSs via a sales agency agreement with Morgan Stanley & Co.
The Company continued to focus on working capital management and achieved another quarter-to-quarter reduction in days sales outstanding and inventory turnover days from 37 days and 63 days to 28 days and 58 days, respectively.
The Company spent US$16 million in capital expenditures, US$13 million for supply prepayments, and US$26 million in acquisition costs for the remaining 48% interest in Jiangsu Yangguang Solar, a silicon ingot producer.
THIRD QUARTER 2008 AND RECENT BUSINESS HIGHLIGHTS
The Company made a number of significant achievements, including:
-- Reached an agreement with Q-Cells AG, pending confirmation of both Boards and based on a previously signed letter of intent, for a three-year manufacturing services agreement for purchase by Q-Cells of 100 MW of PV modules per annum for three years beginning in early 2009. The agreement also provides for PV module technology cooperation.
-- Completed and successfully started operations of 120 MW of additional cell and module capacity. The Company's total nameplate capacity is now 360 MW.
-- Entered into an eight-year, 1.2 gigawatt contract for virgin polysilicon with GCL Silicon Technology.
-- Made significant progress towards vertical-integration, with continued expansion and increased operating volumes at its ingot and wafer slicing operations. The Company expects to end 2008 with 100 MW of wafer capacity (ingot and wire saw), and reach 250 MW by mid-2009.
-- Signed significant binding agreements with key customers, including a 47 MW contract to supply PV modules to Schuco International KG with installations targeted for the Middle East and southeast Europe, and a 30 MW contract to supply PV modules to Martifer Solar Sistemas Solares, a Portugal-based leading solar project developer, installer and producer in Europe.
BUSINESS OUTLOOK
The Company recognizes that the current operating environment is evolving rapidly and is less predictable than in previous periods. In light of these uncertainties and based on current operating trends and market conditions, the Company provides the following outlook:
For the fourth quarter of 2008, management expects:
-- Total 2008 shipments to be at or slightly below the low end of its previously stated guidance of 175 to 190 MW. ASPs in constant Euro terms will decline from the third quarter of 2008 by less than 5%.
-- Gross margin to improve from the third quarter of 2008, reflecting the positive impact of vertical integration, somewhat offset by the strengthening U.S. dollar.
-- Capital expenditures, supply pre-payments and further acquisition payments to be approximately US$100 million.
For the full year of 2009, management expects:
-- Shipment gains of 50%, although this will not be reflected in first quarter volumes. The Company currently has signed binding contracts with key customers totaling 150 MW. These contracts all include a commitment from the customer to provide cash or other monetary guarantees to Solarfun before the end of 2008.
-- ASP to decline 5 to 10% in constant Euro terms from the fourth quarter of 2008.
-- The relative rate of decline in ASPs to be more than offset by lower polysilicon pricing. With an increasing percentage of total wafer volume coming from the Company's in-house facilities, management believes that gross margins could reach 10 to 15%.
-- Raw material availability to be more than sufficient to meet expected demand. The Company is well positioned to take advantage of rapidly declining polysilicon prices. For 60% of the Company's polysilicon and wafer requirements, price levels will be determined based on prevailing market conditions.
-- A larger part of the Company's total wafer volume to come from in-house facilities, which should create greater opportunities for cost optimization and technical innovation.
-- Capacity expansion to be placed on hold until the demand picture becomes more clear.
-- Funding is expected to be adequate to meet 2009 anticipated spending requirements through a combination of cash on hand and access to commercial bank lines of credit. Management anticipates a return to cash flow positive during the second half of 2009.
Harold Hoskens concluded by stating, "Solarfun faces all the same near-term challenges as our competitors and our ability to predict our results with certainty is also reduced. However, we are confident that our longer-term competitive position as a low-cost converter of polysilicon will be enhanced during this period of dynamic market changes. Over the past year, we deliberately avoided signing long term polysilicon supply contracts with the belief that pricing was excessive. While the strategy was painful in the short term, we believe we are much better positioned now in this rapidly evolving environment of greater raw material supply and lower prices. Our customer traction is solid and growing, our quality is respected in the marketplace and improving, and we are prepared to profitably operate within the new industry dynamic. In the end, 2009 will prove to be a critical juncture for our industry; module supply/demand will be rationalized as players retrench from aggressive expansion plans, small or less-capitalized competitors face increasing challenges, and growth in demand in newer solar markets starts to overtake the large traditional markets in Europe. Ultimately, lower module prices will drive additional demand worldwide. We are optimistic that our low cost structure, flexible raw material purchasing program and vertical integration strategy will allow us to improve profitability and meet the near-term challenges confronting us."
Showing posts with label GCL Silicon. Show all posts
Showing posts with label GCL Silicon. Show all posts
Wednesday, December 3, 2008
Saturday, September 6, 2008
Canadian Solar and GCL Silicon Announce Supply Contracts
TORONTO, Sept. 3 /Xinhua-PRNewswire/ -- Canadian Solar Inc. ("the Company","CSI" or "we") (Nasdaq: CSIQ) and GCL Silicon Technology Holdings Inc. ("GCLSilicon") today reported that on August 21, 2008 they signed new long-term supply agreements in which GCL will supply 510 MT of high-purity poly-silicon feedstock in 2008 and 2009 and approximately 1.8 GW of wafers to CSI from 2010 to 2015.
Dr. Shawn Qu, Chairman and CEO of CSI, commented, "GCL Silicon is among the fastest-growing poly-silicon companies and an emerging leader in poly-silicon manufacturing. We have witnessed their ability to ramp up their operations first-hand and we are very pleased to have GCL Silicon as astrategic supply partner. These two contracts help us to further secure our supply chain with strong suppliers at favorable long-term contract prices. The competitive pricing for these recently signed contracts demonstrates that our high growth and balanced supply strategy coupled with our strong supplier relationships are paying off with lower materials costs going forward. We expect this trend to continue with an improved supply environment in 2009 and beyond.
Mr. Hunter Jiang, CEO of GCL Silicon commented, "CSI is one of the world leaders in the solar cell and module producing space, with a strong reputation for superior quality and product innovation. We are very pleased to have become a poly-silicon and wafer supplier to CSI. We view CSI as an important strategic partner and look forward to developing a close relationship with them and are committed to expanding our poly-silicon and wafer production capacity to meet the growing demands of customers such as CSI."
About Canadian Solar Inc. (Nasdaq: CSIQ)
Founded in 2001, Canadian Solar Inc. (CSI) is a vertically integrated manufacturer of solar cell, solar module and custom-designed solar application products serving customers worldwide. CSI is incorporated in Canada and conducts all of its manufacturing operations in China. Backed by years of experience and knowledge in the solar power market and the silicon industry, CSI has become a major global provider of solar power products for a wide range of applications. For more information, please visit http://www.csisolar.com .
About GCL Silicon
GCL Silicon Technology Holdings Inc. (GCL Silicon) supplies poly-siliconand wafers to companies operating in the solar industry. The company currently operates a poly-silicon production facility in Xuzhou, JiangsuProvince in China.
Dr. Shawn Qu, Chairman and CEO of CSI, commented, "GCL Silicon is among the fastest-growing poly-silicon companies and an emerging leader in poly-silicon manufacturing. We have witnessed their ability to ramp up their operations first-hand and we are very pleased to have GCL Silicon as astrategic supply partner. These two contracts help us to further secure our supply chain with strong suppliers at favorable long-term contract prices. The competitive pricing for these recently signed contracts demonstrates that our high growth and balanced supply strategy coupled with our strong supplier relationships are paying off with lower materials costs going forward. We expect this trend to continue with an improved supply environment in 2009 and beyond.
Mr. Hunter Jiang, CEO of GCL Silicon commented, "CSI is one of the world leaders in the solar cell and module producing space, with a strong reputation for superior quality and product innovation. We are very pleased to have become a poly-silicon and wafer supplier to CSI. We view CSI as an important strategic partner and look forward to developing a close relationship with them and are committed to expanding our poly-silicon and wafer production capacity to meet the growing demands of customers such as CSI."
About Canadian Solar Inc. (Nasdaq: CSIQ)
Founded in 2001, Canadian Solar Inc. (CSI) is a vertically integrated manufacturer of solar cell, solar module and custom-designed solar application products serving customers worldwide. CSI is incorporated in Canada and conducts all of its manufacturing operations in China. Backed by years of experience and knowledge in the solar power market and the silicon industry, CSI has become a major global provider of solar power products for a wide range of applications. For more information, please visit http://www.csisolar.com .
About GCL Silicon
GCL Silicon Technology Holdings Inc. (GCL Silicon) supplies poly-siliconand wafers to companies operating in the solar industry. The company currently operates a poly-silicon production facility in Xuzhou, JiangsuProvince in China.
Saturday, August 30, 2008
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.
Monday, April 21, 2008
JA Solar signs supply agreement with GCL Silicon Technology
JA Solar to receive silicon wafers from GCL Silicon Technology under long-term deal
April 21, 2008: 08:40 AM EST
NEW YORK (Associated Press) - JA Solar Holdings Co. said Monday that Jiangsu Zhongneng Polysilicon Technology Development Co., a unit of GCL Silicon Technology Holdings Ltd., has agreed to supply the Chinese solar cell maker with silicon wafers under a long-term deal.
Financial terms were not disclosed.
Under the agreement, GCL Silicon Technology will supply about 6,000 megawatts of silicon wafers to JA Solar through December 2015 at predetermined prices.
JA Solar said delivery of the wafers began this month.
"This agreement is an important part of our growth strategy, as we further strengthen and diversify our supply position to support JA Solar's rapid growth and increased customer demand," said JA Solar Chief Executive Samuel Yang in a statement.
April 21, 2008: 08:40 AM EST
NEW YORK (Associated Press) - JA Solar Holdings Co. said Monday that Jiangsu Zhongneng Polysilicon Technology Development Co., a unit of GCL Silicon Technology Holdings Ltd., has agreed to supply the Chinese solar cell maker with silicon wafers under a long-term deal.
Financial terms were not disclosed.
Under the agreement, GCL Silicon Technology will supply about 6,000 megawatts of silicon wafers to JA Solar through December 2015 at predetermined prices.
JA Solar said delivery of the wafers began this month.
"This agreement is an important part of our growth strategy, as we further strengthen and diversify our supply position to support JA Solar's rapid growth and increased customer demand," said JA Solar Chief Executive Samuel Yang in a statement.
Thursday, April 3, 2008
Trina Solar Signs Long Term Supply Agreement with GCL Silicon Technology
CHANGZHOU, China, April 2, 2008, 2008 /Xinhua-PRNewswire-FirstCall via COMTEX/ -- Trina Solar Limited (''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 a subsidiary of GCL Silicon Technology Holdings Ltd. (collectively, ''GCL Silicon Technology'').
Under this agreement, GCL Silicon Technology will supply Trina Solar with virgin polysilicon sufficient to produce approximately 2,600 MW of solar modules in aggregate over eight years. Delivery of polysilicon at predetermined prices will start in April of 2008.
''This agreement represents a key component of our strategy to secure sufficient feedstock to support our sales growth. Combined with our other long-term agreements, planned in-house polysilicon production, and integrated manufacturing cost efficiencies, we believe we are in a strong position to expand our margins in the long term as the cost of solar energy approaches grid parity," said Jifan Gao, Trina Solar's Chairman and Chief Executive Officer. "This eight-year agreement will provide Trina Solar with a large quantity of polysilicon at favorable terms with delivery scheduled to commence this month."
"We are pleased to become a polysilicon supplier to Trina Solar and look forward to developing a close relationship with them," said Hunter Jiang, President of GCL Silicon Technology. "GCL Silicon Technology intends to expand its polysilicon production capacity to meet the growing demands of customers like Trina Solar.''
This long-term polysilicon supply agreement will enhance the Company's raw material supplies and increase its cost structure visibility to strengthen its position as a leading global PV manufacturer. After signing this agreement and together with other polysilicon supply agreements, the Company has now secured approximately 95% of its estimated silicon feedstock requirements for 2008, an equivalent of approximately 195 MW based on a production target of 200 to 210 MW of module output.
About Trina Solar Limited
Trina Solar Limited, 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. Trina Solar'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 GCL Silicon Technology
GCL Silicon Technology Holdings Limited, through its subsidiary Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., sells polysilicon and wafers to the solar industry. The company operates a polysilicon production facility in Xuzhou, Jiangsu Province in China.
Under this agreement, GCL Silicon Technology will supply Trina Solar with virgin polysilicon sufficient to produce approximately 2,600 MW of solar modules in aggregate over eight years. Delivery of polysilicon at predetermined prices will start in April of 2008.
''This agreement represents a key component of our strategy to secure sufficient feedstock to support our sales growth. Combined with our other long-term agreements, planned in-house polysilicon production, and integrated manufacturing cost efficiencies, we believe we are in a strong position to expand our margins in the long term as the cost of solar energy approaches grid parity," said Jifan Gao, Trina Solar's Chairman and Chief Executive Officer. "This eight-year agreement will provide Trina Solar with a large quantity of polysilicon at favorable terms with delivery scheduled to commence this month."
"We are pleased to become a polysilicon supplier to Trina Solar and look forward to developing a close relationship with them," said Hunter Jiang, President of GCL Silicon Technology. "GCL Silicon Technology intends to expand its polysilicon production capacity to meet the growing demands of customers like Trina Solar.''
This long-term polysilicon supply agreement will enhance the Company's raw material supplies and increase its cost structure visibility to strengthen its position as a leading global PV manufacturer. After signing this agreement and together with other polysilicon supply agreements, the Company has now secured approximately 95% of its estimated silicon feedstock requirements for 2008, an equivalent of approximately 195 MW based on a production target of 200 to 210 MW of module output.
About Trina Solar Limited
Trina Solar Limited, 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. Trina Solar'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 GCL Silicon Technology
GCL Silicon Technology Holdings Limited, through its subsidiary Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., sells polysilicon and wafers to the solar industry. The company operates a polysilicon production facility in Xuzhou, Jiangsu Province in China.
Subscribe to:
Posts (Atom)
