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JA Solar Announces Third Quarter 2017 Results

BEIJING, Nov. 15, 2017 (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, 2017.

Third Quarter 2017 Highlights

  • Total shipments were 1,640.9 megawatts (“MW”), consisting of 1,582.5 MW of modules and 37.9 MW of cells to external customers, and 20.5 MW of modules to the Company’s downstream projects.  External shipments were up 30.6% y/y and down 30.0% sequentially

  • Shipments of modules were 1,582.5 MW, an increase of 31.9% y/y and a decrease of 26.3% sequentially

  • Shipments of cells were 37.9 MW, a decrease of 7.3% y/y and 77.3% sequentially

  • Net revenue was RMB 4.3 billion ($652.6 million), an increase of 4.3% y/y and a decrease of 27.1% sequentially

  • Gross margin was 11.8%, a decrease of 200 basis points y/y and 110 basis points sequentially

  • Operating profit was RMB 169.8 million ($25.5 million), compared to RMB 121.4 million ($18.2 million) in the third quarter of 2016, and RMB 255.1 million ($38.3 million) in the second quarter of 2017

  • Net income was RMB 41.9 million ($6.3 million), compared to RMB 44.1 million ($6.6 million) in the third quarter of 2016, and RMB 134.6 million ($20.2 million) in the second quarter of 2017

  • Earnings per diluted ADS were RMB 0.89 or $0.13, compared to RMB 0.86 or $0.13 in the third quarter of 2016, and RMB 2.87 or $0.43 in the second quarter of 2017

  • Cash and cash equivalents were RMB 2.1 billion ($309.1 million), a decrease of RMB 1.2 billion ($176.9 million) during the quarter

  • Non-GAAP earnings1 per diluted ADS were RMB 0.89 or $0.13, compared to RMB 0.86 or $0.13 in the third quarter of 2016, and RMB 2.87 or $0.43 in the second quarter of 2017

Mr. Baofang Jin, Chairman and CEO of JA Solar, commented, "Third quarter results were in-line with our expectations.  Total module shipments during the quarter increased more than 30% year-over-year to approximately 1.6 GW, largely driven by demand from our key markets, including China, the U.S., Europe and Japan.  Additionally, we maintained gross margin in the low teens through stringent cost control in an adverse pricing environment of polysilicon and wafers during the quarter."

Mr. Jin continued, "We are seeing some uncertainties around the ongoing trade cases in the U.S. and India, which could impact global solar demand in the mid-term.  Additionally, accelerated capacity expansion in the industry is reshaping the competition landscape. That being said, we remain confident that our balanced global footprint and flexible business model will enable us to adjust to evolving market conditions as in the past cycles.  Our team remains focused on executing our business strategy to provide our customers with high-quality, high-reliability products, as we continue to position JA Solar for long-term growth.”

All shipment and financial figures refer to the quarter ended September 30, 2017, unless otherwise specified.  All “year over year” or “y/y” comparisons are against the quarter ended September 30, 2016.  All “sequential” comparisons are against the quarter ended June 30, 2017.

Total shipments were 1,640.9 MW, within the guidance range of 1,600 to 1,700 MW. External shipments of 1,620.4 MW increased 30.6% year-over-year and decreased 30.0% sequentially.

External shipments breakdown by product (MW)

  2016Q3 2017Q2 2017Q3 QoQ% YoY%
Modules and module tolling 1,200.0 2,147.5 1,582.5 -26.3 % 31.9 %
Cells and cell tolling 40.9 167.2 37.9 -77.3 % -7.3 %
Total 1,240.9 2,314.7 1,620.4 -30.0 % 30.6 %
               

External shipments breakdown by region (percentage)

  2016Q3 2017Q2 2017Q3 QoQ(pp) YoY(pp)
China 32.0 % 59.2 % 47.3 % -11.90 15.30
APAC ex-China 25.8 % 24.9 % 16.3 % -8.60 -9.50
Europe 6.5 % 5.1 % 14.1 % 9.00 7.60
North America 13.0 % 8.1 % 17.2 % 9.10 4.20
South America 20.2 % 0.4 % 0.4 % 0.00 -19.80
Others 2.5 % 2.3 % 4.7 % 2.40 2.20
                 

Net revenue was RMB 4.3 billion ($652.6 million), an increase of 4.3% y/y and a decrease of 27.1% sequentially.

Gross profit of RMB 513.6 million ($77.2 million) decreased 10.6% y/y and 33.4% sequentially.  Gross margin was 11.8%, which compares to 13.8% in the year-ago quarter, and 12.9% in the second quarter of 2017.

Total operating expenses of RMB 343.8 million ($51.7 million) were 7.9% of revenue.  This compares to operating expenses of 10.9% of revenue in the year-ago quarter, and 8.7% of revenue in the second quarter of 2017.

Operating profit was RMB 169.8 million ($25.5 million), compared to RMB 121.4 million ($18.2 million) in the year-ago quarter, and RMB 255.1 million ($38.3 million) in the second quarter of 2017.  Operating margin was 3.9%, compared with 2.9% in the prior-year period and 4.3% in the previous quarter.

Interest expense was RMB 80.3 million ($12.1 million), compared to RMB 75.4 million ($11.3 million) in the year-ago quarter, and RMB 82.6 million ($12.4 million) in the second quarter of 2017.

The change in fair value of warrant derivatives was nil, compared with positive RMB 17 thousand ($2.6 thousand) in the year-ago quarter, and nil in the second quarter of 2017. 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 0.89 or $0.13, compared to earnings per diluted ADS of RMB 0.86 or $0.13 in the year-ago quarter, and earnings per diluted ADS of RMB 2.87 or $0.43 in the second quarter of 2017.

Liquidity

As of September 30, 2017, the Company had cash and cash equivalents of RMB 2.1 billion ($309.1 million), and total working capital of RMB 291.2 million ($43.8 million).  Total short-term borrowings were RMB 3.3 billion ($491.8 million). Total long-term borrowings were RMB 2.9 billion ($433.2 million), of which RMB 961.3 million ($144.5 million) were due in one year.

Business Outlook

For the fourth quarter of 2017, the Company expects total cell and module shipments to be in the range of 1,600 to 1,800 MW.  Nearly all will be external shipments.

Investor Conference Call / Webcast Details

JA Solar's management will host an earnings conference call on November 15, 2017 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 7597129.

A replay of the conference call may be accessed by phone at the following numbers until November 23, 2017.  To access the replay, please reference the conference ID 7597129.

  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, 2017, which was RMB 6.6533 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, 2017, 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 5.2 GW of solar power products in 2016. 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 and Bac Giang, Vietnam.

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

Contact:

The Blueshirt Group

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

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


 
JA Solar Holdings Co., Ltd.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
 
  For three months ended
  Sep. 30, 2016   Jun. 30, 2017   Sep. 30, 2017   Sep. 30, 2017  
  RMB'000   RMB'000   RMB'000   USD'000  
         
Net revenues 4,162,927   5,953,211   4,341,718   652,566  
Cost of sales (3,588,469 ) (5,182,372 ) (3,828,137 ) (575,374 )
Gross profit 574,458   770,839   513,581   77,192  
Selling, general and administrative expenses (406,194 ) (480,065 ) (302,786 ) (45,509 )
Research and development expenses (46,871 ) (35,667 ) (40,964 ) (6,157 )
Total operating expenses (453,065 ) (515,732 ) (343,750 ) (51,666 )
Income from operations 121,393   255,107   169,831   25,526  
Interest expense (75,378 ) (82,617 ) (80,283 ) (12,067 )
Change in fair value of warrant derivatives 17     -      -      -   
Other income/(loss), net 10,450   13,654   (35,594 ) (5,350 )
Income before income taxes 56,482   186,144   53,954   8,109  
Income tax expense (12,361 ) (51,536 ) (12,061 ) (1,813 )
Net income 44,121   134,608   41,893   6,296  
Less: loss attributable to noncontrolling interest (715 )   -      -      -   
Net income attributable to JA Solar Holdings 44,836   134,608   41,893   6,296  
         
Net income per share attributable to ordinary shareholders:        
Basic 0.17   0.57   0.18   0.03  
Diluted 0.17   0.57   0.18   0.03  
         
Weighted average number of shares outstanding:        
Basic  234,290,842   234,311,611   234,360,842   234,360,842  
Diluted 234,338,817   234,333,946   234,383,172   234,383,172  
         
Comprehensive income        
Net income 44,121   134,608   41,893   6,296  
Foreign currency translation adjustments, net of tax (3,776 ) (786 ) 3,276   492  
Other comprehensive (loss)/income (3,776 ) (786 ) 3,276   492  
Comprehensive income 40,345   133,822   45,169   6,788  
Loss attributable to noncontrolling interest (715 )   -      -      -   
Comprehensive income attributable to JA Solar Holdings 41,060   133,822   45,169   6,788  
         
NON-GAAP RECONCILIATION        
         
GAAP net income attributable to JA Solar Holdings 44,836   134,608   41,893   6,296  
Change in fair value of warrant derivatives (17 )   -      -      -   
Non-GAAP net income attributable to JA Solar Holdings 44,819   134,608   41,893   6,296  
         
Non-GAAP net income per share attributable to ordinary shareholders:        
Basic 0.17   0.57   0.18   0.03  
Diluted 0.17   0.57   0.18   0.03  
         
Non-GAAP weighted average number of shares outstanding:        
Basic 234,290,842   234,311,611   234,360,842   234,360,842  
Diluted 234,338,817   234,333,946   234,383,172   234,383,172  
         


 
JA Solar Holdings Co., Ltd.
Condensed Consolidated Statements of Operations
(Unaudited)
  For nine months ended
  Sep. 30, 2016   Sep. 30, 2017   Sep. 30, 2017  
  RMB'000   RMB'000   USD'000  
       
Net revenues 11,746,233   13,987,335   2,102,315  
Cost of sales (9,968,121 ) (12,269,579 ) (1,844,134 )
Gross profit 1,778,112   1,717,756   258,181  
Selling, general and administrative expenses (1,114,964 ) (1,095,709 ) (164,687 )
Research and development expenses (130,513 ) (117,091 ) (17,599 )
Total operating expenses (1,245,477 ) (1,212,800 ) (182,286 )
Income from operations 532,635   504,956   75,895  
Interest expense (211,455 ) (246,174 ) (37,000 )
Change in fair value of warrant derivatives 70,882     -      -   
Other income, net 57,610   575   86  
Income before income taxes 449,672   259,357   38,981  
Income tax expenses (83,487 ) (74,733 ) (11,233 )
Net income 366,185   184,624   27,748  
Less: income attributable to noncontrolling interest 990     -      -   
Net income attributable to JA Solar Holdings 365,195   184,624   27,748  
       
Net income per share attributable to ordinary shareholders:      
Basic 1.32   0.79   0.12  
Diluted 1.32   0.79   0.12  
       
Weighted average number of shares outstanding:      
Basic   234,290,842     234,321,467     234,321,467  
Diluted   234,434,640     234,339,597     234,339,597  
       
Comprehensive income      
Net income 366,185   184,624   27,748  
Foreign currency translation adjustments, net of tax (25,984 ) 3,572   537  
Other comprehensive (loss)/income (25,984 ) 3,572   537  
Comprehensive income 340,201   188,196   28,285  
Income attributable to noncontrolling interest 990     -      -   
Comprehensive income attributable to JA Solar Holdings 339,211   188,196   28,285  
       
NON-GAAP RECONCILIATION      
       
GAAP net income attributable to JA Solar Holdings 365,195   184,624   27,748  
Change in fair value of warrant derivatives (70,882 )   -      -   
Non-GAAP net income attributable to JA Solar Holdings 294,313   184,624   27,748  
       
Non-GAAP net income per share attributable to ordinary shareholders:      
Basic 1.06   0.79   0.12  
Diluted 1.06   0.79   0.12  
       
Non-GAAP weighted average number of shares outstanding:      
Basic 234,290,842   234,321,467   234,321,467  
Diluted 234,434,640   234,339,597   234,339,597  
       


 
JA Solar Holdings Co., Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
       
  Dec. 31, Sep 30,
  2016 2017 2017
  RMB'000 RMB'000 USD'000
   
ASSETS      
Current assets:       
Cash and cash equivalents   2,569,402   2,056,706   309,126
Restricted cash   836,761   1,078,252   162,063
Accounts receivable    2,753,678   2,872,657   431,764
Notes receivable    563,144   84,373   12,681
Inventories   2,460,488   3,377,184   507,595
Advances to suppliers   282,369   389,040   58,473
Other current assets   799,314   761,886   114,512
Total current assets   10,265,156   10,620,098   1,596,214
Property and equipment, net   5,219,501   6,037,223   907,403
Project asset   2,338,648   2,832,756   425,767
Advances to suppliers   97,429   40,017   6,015
Prepaid land use rights   524,208   528,523   79,438
Long-term investment   69,022   74,527   11,202
Other long term assets   517,292   697,728   104,870
Total assets   19,031,256   20,830,872   3,130,909
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current liabilities:      
Short-term borrowings    2,912,866   3,272,227   491,820
Accounts payable    2,635,525   3,340,136   502,027
Advances from customers   610,718   964,325   144,939
Current portion of long term borrowings   525,256   961,329   144,489
Accrued and other liabilities    1,966,475   1,790,875   269,172
Total current liabilities   8,650,840   10,328,892   1,552,447
Long-term borrowings    2,701,438   1,920,554   288,662
Other long term liabilities   1,217,648   1,931,484   290,305
Total liabilities   12,569,926   14,180,930   2,131,414
Total JA Solar Holdings shareholders' equity   6,461,130   6,649,742   999,465
Noncontrolling interest   200   200   30
Total shareholders' equity   6,461,330   6,649,942   999,495
Total liabilities and shareholders’ equity   19,031,256   20,830,872   3,130,909
       


JA Solar Holdings Co., Ltd.

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