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JA Solar Announces Third Quarter 2016 Results

BEIJING, Nov. 17, 2016 (GLOBE NEWSWIRE) -- JA Solar Holdings Co., Ltd. (Nasdaq:JASO) ("JA Solar" or the "Company"), one of the world's largest manufacturers of high-performance solar power products, today announced its unaudited financial results for its third quarter ended September 30, 2016.

Third Quarter 2016 Highlights

  • Total shipments were 1,240.9 megawatts (“MW”), nearly all of which were modules and cells shipped to external customers. External shipments were up +10.1% y/y and up +0.9% sequentially
     
  • Shipments of modules and module tolling were 1,200.0 MW, an increase of +11.8% y/y and +5.8% sequentially
     
  • Shipments of cells and cell tolling were 40.9 MW, a decrease of 22.8% y/y and 57.0% sequentially
     
  • Net revenue was RMB 4.2 billion ($624.3 million), an increase of +9.0% y/y and +1.2 % sequentially
     
  • Gross margin was 13.8%, a decrease of 390 basis points y/y and 150 basis points sequentially
     
  • Operating profit was RMB 121.4 million ($18.2 million), compared to RMB 299.1 million ($44.9 million) in the third quarter of 2015, and RMB 188.0 million ($28.2 million) in the second quarter of 2016
     
  • Net income was RMB 44.1 million ($6.6 million), compared to RMB 258.6 million ($38.8 million) in the third quarter of 2015, and RMB 164.1 million ($24.6 million) in the second quarter of 2016
     
  • Earnings per diluted ADS were RMB 0.86 or $0.13, compared to RMB 4.42 or $0.66 in the third quarter of 2015, and RMB 2.87 or $0.43 in the second quarter of 2016
     
  • Cash and cash equivalents were RMB 2.0 billion ($298.2 million), a decrease of RMB 25.1million ($3.8 million) during the quarter
     
  • Non-GAAP earnings[1] per diluted ADS were RMB 0.86 or $0.13, compared to RMB 4.35 or $0.65 in the third quarter of 2015, and RMB 2.04 or $0.31 in the second quarter of 2016

Mr. Baofang Jin, Chairman and CEO of JA Solar, commented, “Third quarter results were in-line with our expectations with external shipments and revenue growing 10% and 9% year-over-year, respectively. We executed our strategy to redirect solar product sales to several stronger international markets, as shipments to the domestic market of China declined significantly after demand was pulled forward into Q2. Furthermore, our downstream strategy remains intact. We have approximately 50 MW of downstream projects under construction and intend to develop another 150 to 200 MW in the coming year.”

Mr. Jin continued, “While we anticipate more market headwinds in the near-term, we are confident that our favorable geographic exposure, prudent cost control and flexible business model will enable us to succeed. As market conditions improve, we will be positioned for strong long-term growth.”

All shipment and financial figures refer to the quarter ended September 30, 2016, unless otherwise specified. All “year over year” or “y/y” comparisons are against the quarter ended September 30, 2015. All “sequential” comparisons are against the quarter ended June 30, 2016.

Total shipments were 1,240.9 MW, exceeding the low end of the previously announced guidance range of 1,200 to 1,300 MW. External shipments of 1,240.9 MW increased 10.1% year over year and 0.9% sequentially.

External shipments breakdown by product (MW)

  2015Q3 2016Q2 2016Q3 QoQ% YoY%
Modules and module tolling 1,073.8 1,134.2 1,200.0   5.8 %   11.8 %
Cells and cell tolling 53.0 95.1 40.9   -57.0 %   -22.8 %
Total 1,126.8 1229.3 1,240.9   0.9 %   10.1 %

External shipments breakdown by region (percentage)

  2015Q3 2016Q2 2016Q3 QoQ(pp) YoY(pp)
China   53.1 %   63.9 %   32.0 % -31.9pp -21.1pp
APAC ex-China   36.3 %   12.0 %   25.8 % 13.8pp -10.5pp
Europe   7.8 %   3.7 %   6.5 % 2.8pp -1.3pp
North America   1.0 %   9.3 %   13.0 % 3.7pp 12.0pp
South America   0 %   9.9 %   20.2 % 10.3pp 20.2pp
Others   1.8 %   1.2 %   2.5 % 1.3pp 0.7pp

Net revenue was RMB 4.2 billion ($624.3 million), an increase of +9.0% y/y and +1.2% sequentially.

Gross profit of RMB 574.5 million ($86.1 million) decreased 15.2% y/y and 8.6% sequentially. Gross margin was 13.8%, which compares to 17.7% in the year-ago quarter, and 15.3% in the second quarter of 2016.

Total operating expenses of RMB 453.1 million ($67.9 million) were 10.9% of revenue. This compares to operating expenses of 9.9% of revenue in the year-ago quarter, and 10.7% of revenue in the second quarter of 2016.

Operating profit was RMB 121.4 million ($18.2 million), compared to RMB 299.1 million ($44.9 million) in the year-ago quarter, and RMB 188.0 million ($28.2 million) in the second quarter of 2016. Operating margin was 2.9%, compared with 7.8% in the prior year period and 4.6% in the previous quarter.

Interest expense was RMB 75.4 million ($11.3 million), compared to RMB 58.2 million ($8.7 million) in the year-ago quarter, and RMB 68.8 million ($10.3 million) in the second quarter of 2016.

The change in fair value of warrant derivatives was a gain of RMB 17.0 thousand ($2.6 thousand), compared with RMB 4.4 million ($0.7 million) in the year-ago quarter, and RMB 47.4 million ($7.1 million) in the second quarter of 2016. The warrants were issued on August 16, 2013 in conjunction with the Company’s $96 million registered direct offering, and expired on August 16, 2016.

Earnings per diluted ADS were RMB 0.86 or $0.13, compared to earnings per diluted ADS of RMB 4.42 or $0.66 in the year-ago quarter, and earnings per diluted ADS of RMB 2.87 or $0.43 in the second quarter of 2016.

Liquidity

As of September 30, 2016, the Company had cash and cash equivalents of RMB 2.0 billion ($298.2 million), and total working capital of RMB 1.5 billion ($228.8 million). Total short-term borrowings were RMB 2.9 billion ($429.0 million). Total long-term borrowings were RMB 3.1 billion ($467.8 million), of which RMB 536.3 million ($80.4 million) were due in one year.

Business Outlook

For the fourth quarter of 2016, the Company expects total cell and module shipments to be in the range of 1,200 to 1,300 MW, with essentially all being external shipments. Accordingly, full year 2016 shipments are expected to range from 4.9 GW to 5.0 GW, below the Company’s previous guidance of 5.2 GW to 5.5 GW.

Investor Conference Call / Webcast Details

JA Solar's management will host an earnings conference call on November 17, 2016 at 8:00 a.m. U.S. Eastern Time (9:00 p.m. China Time).

Dial-in details for the earnings conference call are as follows:

  Phone Number Toll-Free Number
United States +1 8456750437 +1 8665194004
Hong Kong +852 30186771 +852 800906601
Mainland China +86 8008190121
+86 4006208038
 
Other International +65 67135090  

Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is “JA Solar".

A replay of the conference call may be accessed by phone at the following numbers until November 25, 2016. To access the replay, please reference the conference ID 13977699.

  Phone Number Toll-Free Number
United States +1 6462543697 +1 8554525696
Hong Kong +852 30512780 +852 800963117
Mainland China +86 8008700206
+86 4006322162
 
Other International +61 281990299  

 

Currency Convenience Translation

The conversion of Renminbi into U.S. dollars in this release, made solely for the convenience of the reader, is based on the noon buying rate in the city of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York as of September 30, 2016, which was RMB 6.6685 to $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 that rate on September 30, 2016, or at any other date. The percentages stated in this press release are calculated based on Renminbi.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words such as "may," "expect," "anticipate," "aim," "intend," "plan," "believe," "estimate," "potential," "continue," and other similar statements. Statements other than statements of historical facts in this announcement are forward-looking statements, including but not limited to, our expectations regarding the expansion of our manufacturing capacities, our future business development, and our beliefs regarding our production output and production outlook. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. Further information regarding these and other risks is included in Form 20-F and other documents filed with the Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

About JA Solar Holdings Co., Ltd.

JA Solar Holdings Co., Ltd. is a leading manufacturer of high-performance solar power products that convert sunlight into electricity for residential, commercial, and utility-scale power generation. The Company is one of the world’s largest producers of solar power products. Its standard and high-efficiency product offerings are among the most powerful and cost-effective in the industry. The Company distributes products under its own brand and also produces on behalf of its clients. The Company shipped 4.0 GW of solar power products in 2015. JA Solar is headquartered in Beijing, China, and maintains production facilities in Shanghai, Hebei, Jiangsu and Anhui provinces in China, as well as Penang, Malaysia.

For more information, please visit www.jasolar.com.

[1] JA Solar adjusts net income attributable to the Company's ordinary shareholders to exclude (1) changes in fair value of certain warrants granted to certain investors in a registered direct offering (the "Offering") closed on August 16, 2013, and (2) fair value of such warrants exceeding net proceeds from the Offering.

JA Solar Holdings Co., Ltd.  
Condensed Consolidated Statements of Operations and Comprehensive Income  
(Unaudited)  
  For three months ended  
  Sep. 30, 2015 Jun. 30, 2016 Sep. 30, 2016 Sep. 30, 2016  
  RMB'000 RMB'000 RMB'000 USD'000  
           
Net revenues   3,819,510     4,113,592     4,162,927     624,267    
Cost of sales   (3,141,961 )   (3,485,300 )   (3,588,469 )   (538,122 )  
Gross profit   677,549     628,292     574,458     86,145    
Selling, general and administrative expenses   (344,152 )   (396,294 )   (406,194 )   (60,912 )  
Research and development expenses   (34,278 )   (44,043 )   (46,871 )   (7,029 )  
Total operating expenses   (378,430 )   (440,337 )   (453,065 )   (67,941 )  
Income from operations   299,119     187,955     121,393     18,204    
Interest expense   (58,213 )   (68,804 )   (75,378 )   (11,304 )  
Change in fair value of warrant derivatives   4,394     47,417     17     3    
Other income, net   74,301     30,878     10,450     1,567    
Income before income taxes   319,601     197,446     56,482     8,470    
Income tax expense   (61,014 )   (33,357 )   (12,361 )   (1,854 )  
Net income   258,587     164,089     44,121     6,616    
Less: income/(loss) attributable to noncontrolling interest   (644 )   388     (715 )   (107 )  
Net income attributable to JA Solar Holdings   259,231     163,701     44,836     6,723    
           
Net income per share attributable to ordinary shareholders:          
  Basic   0.88     0.57     0.17     0.03    
  Diluted   0.88     0.57     0.17     0.03    
           
Weighted average number of shares outstanding:          
  Basic    242,328,656     234,290,842     234,290,842     234,290,842    
  Diluted   242,473,131     234,443,142     234,338,817     234,338,817    
           
Comprehensive income          
Net income   258,587     164,089     44,121     6,616    
  Foreign currency translation adjustments, net of tax   (32,876 )   (22,068 )   (3,776 )   (566 )  
Other comprehensive loss   (32,876 )   (22,068 )   (3,776 )   (566 )  
Comprehensive income   225,711     142,021     40,345     6,050    
Income/(loss) attributable to noncontrolling interest   (644 )   388     (715 )   (107 )  
Comprehensive income attributable to JA Solar Holdings   226,355     141,633     41,060     6,157    
           
NON-GAAP RECONCILIATION          
           
GAAP net income attributable to JA Solar Holdings   259,231     163,701     44,836     6,723    
Change in fair value of warrant derivatives   (4,394 )   (47,417 )   (17 )   (3 )  
Non-GAAP net income attributable to JA Solar Holdings   254,837     116,284     44,819     6,720    
           
Non-GAAP net income per share attributable to ordinary shareholders:          
  Basic   0.87     0.41     0.17     0.03    
  Diluted   0.87     0.41     0.17     0.03    
           
Non-GAAP weighted average number of shares outstanding:          
  Basic   242,328,656     234,290,842     234,290,842     234,290,842    
  Diluted   242,473,131     234,443,142     234,338,817     234,338,817    
           
Note:  JA Solar excludes net income attributable to the participating warrant holder of RMB 4.5 million (US$0.7 million) from the numerator of basic EPS in the third quarter of 2016.  

 

JA Solar Holdings Co., Ltd.  
Condensed Consolidated Statements of Operations  
(Unaudited)  
  For nine months ended  
  Sep. 30, 2015 Sep. 30, 2016 Sep. 30, 2016  
  RMB'000 RMB'000 USD'000  
         
Net revenues   8,930,960     11,746,233     1,761,451    
Cost of sales   (7,422,460 )   (9,968,121 )   (1,494,807 )  
Gross profit   1,508,500     1,778,112     266,644    
Selling, general and administrative expenses   (796,614 )   (1,114,964 )   (167,199 )  
Research and development expenses   (107,012 )   (130,513 )   (19,572 )  
Total operating expenses   (903,626 )   (1,245,477 )   (186,771 )  
Income from operations   604,874     532,635     79,873    
Interest expense   (183,364 )   (211,455 )   (31,710 )  
Change in fair value of warrant derivatives   25,596     70,882     10,629    
Other income, net   82,820     57,610     8,639    
Income before income taxes   529,926     449,672     67,431    
Income tax expenses   (100,337 )   (83,487 )   (12,520 )  
Net income   429,589     366,185     54,911    
Less: income/(loss) attributable to noncontrolling interest   (663 )   990     148    
Net income attributable to JA Solar Holdings   430,252     365,195     54,763    
         
Net income per share attributable to ordinary shareholders:        
  Basic   1.45     1.32     0.20    
  Diluted   1.44     1.32     0.20    
         
Weighted average number of shares outstanding:        
  Basic     246,627,317       234,290,842       234,290,842    
  Diluted     246,868,295       234,434,640       234,434,640    
         
Comprehensive income        
Net income   429,589     366,185     54,911    
  Foreign currency translation adjustments, net of tax   (30,810 )   (25,984 )   (3,897 )  
Other comprehensive loss   (30,810 )   (25,984 )   (3,897 )  
Comprehensive income   398,779     340,201     51,014    
Income/(loss) attributable to noncontrolling interest   (663 )   990     148    
Comprehensive income attributable to JA Solar Holdings   399,442     339,211     50,866    
         
NON-GAAP RECONCILIATION        
         
GAAP net income attributable to JA Solar Holdings   430,252     365,195     54,763    
Change in fair value of warrant derivatives   (25,596 )   (70,882 )   (10,629 )  
Non-GAAP net income attributable to JA Solar Holdings   404,656     294,313     44,134    
         
Non-GAAP net income per share attributable to ordinary shareholders:        
  Basic   1.36     1.06     0.16    
  Diluted   1.36     1.06     0.16    
         
Non-GAAP weighted average number of shares outstanding:        
  Basic   246,627,317     234,290,842     234,290,842    
  Diluted   246,868,295     234,434,640     234,434,640    

 

JA Solar Holdings Co., Ltd.  
Condensed Consolidated Balance Sheets  
(Unaudited)  
                 
  Dec. 31, Sep. 30,  
  2015     2016     2016  
  RMB'000     RMB'000     USD'000  
     
ASSETS                
Current assets:                
Cash and cash equivalents 2,883,294     1,988,819     298,241  
Restricted cash 663,518     759,566     113,904  
Accounts receivable 2,872,775     3,191,666     478,618  
Notes receivable 837,711     152,461     22,863  
Inventories 1,660,543     2,628,699     394,197  
Advances to suppliers 473,310     274,476     41,160  
Other current assets 633,354     1,178,816     176,774  
Total current assets 10,024,505     10,174,503     1,525,757  
Property and equipment, net 4,365,348     5,201,064     779,945  
Project asset 1,028,615     2,313,280     346,897  
Advances to suppliers 195,341     114,359     17,149  
Prepaid land use rights 428,495     528,265     79,218  
Long-term investment 55,169     66,994     10,046  
Other long term assets 208,430     263,173     39,465  
Total assets 16,305,903     18,661,638     2,798,477  
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Current liabilities:                
Short-term borrowings 2,194,957     2,860,456     428,950  
Accounts payable 2,389,467     2,689,848     403,366  
Advances from customers 691,867     475,496     71,305  
Current portion of long term borrowings 238,400     536,338     80,429  
Derivative liabilities-warrants 71,237     -     -  
Accrued and other liabilities 1,588,885     2,086,639     312,911  
Total current liabilities 7,174,813     8,648,777     1,296,961  
Long-term borrowings 2,461,017     2,583,444     387,410  
Other long term liabilities 752,925     1,170,290     175,495  
Total liabilities 10,388,755     12,402,511     1,859,866  
Total JA Solar Holdings shareholders' equity 5,819,695     6,160,484     923,819  
Noncontrolling interest 97,453     98,643     14,792  
Total shareholders' equity 5,917,148     6,259,127     938,611  
Total liabilities and shareholders’ equity 16,305,903     18,661,638     2,798,477  
                 
Contact:

The Blueshirt Group

Ralph Fong
Phone: +1 (415) 489-2195
Email: ralph@blueshirtgroup.com

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