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JA Solar Announces Fourth Quarter and Fiscal Year 2017 Results

BEIJING, April 30, 2018 (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 fourth quarter and fiscal year ended December 31, 2017.

Fourth Quarter 2017 Highlights

  • Total shipments were 2,205.9 megawatts (“MW”), consisting of 2,088.1 MW of modules and 102.8 MW of cells to external customers, and 15.0 MW of modules to the Company’s downstream projects. External shipments were up 55.2% y/y and 35.2% sequentially
     
  • Shipments of modules and module tolling were 2,088.1 MW, an increase of 54.3% y/y and 31.9% sequentially
     
  • Shipments of cells and cell tolling were 102.8 MW, an increase of 74.5% y/y and 171.2% sequentially
     
  • Net revenue was RMB 5.7 billion ($871.8 million), an increase of 42.1% y/y and 30.6% sequentially
     
  • Gross margin was 12.2%, a decrease of 70 basis points y/y and an increase of 40 basis points sequentially
     
  • Operating profit was RMB 210.7 million ($32.4 million), compared to RMB 370.5 million ($56.9 million) in the fourth quarter of 2016, and RMB 169.8 million ($26.1 million) in the third quarter of 2017
     
  • Net income was RMB 115.5 million ($17.8 million), compared to RMB 353.4 million ($54.3 million) in the fourth quarter of 2016, and RMB 41.9 million ($6.4 million) in the third quarter of 2017
     
  • Earnings per diluted ADS were RMB 2.46 or $0.38, compared to RMB 6.80 or $1.05 in the fourth quarter of 2016, and RMB 0.89 or $0.14 in the third quarter of 2017
     
  • Cash and cash equivalents were RMB 1.5 billion ($226.5 million), a decrease of RMB 583.3 million ($89.6 million) during the quarter
     
  • Non-GAAP earnings1 per diluted ADS were RMB 2.46 or $0.38, compared to RMB 6.80 or $1.05 in the fourth quarter of 2016, and RMB 0.89 or $0.14 in the third quarter of 2017

Fiscal Year 2017 Highlights

  • Total shipments were 7.6 gigawatts ("GW"), consisting of 7,143.1 MW of modules and module tolling and 358.0 MW of cells and cell tolling to external customers, and 127.4 MW of modules to the Company’s downstream projects. External Shipments represented an increase of 52.4% from 4.9 GW in fiscal year 2016
     
  • Net revenue was RMB 19.7 billion ($3.0 billion), compared to RMB 15.7 billion ($2.4 billion) in fiscal year 2016
     
  • Gross margin was 12.3%, compared to 14.6% in fiscal year 2016
     
  • Operating profit was RMB 715.7 million ($110.0 million), compared to an operating profit of RMB 903.2 million ($138.8 million) in fiscal year 2016
     
  • Net income was RMB 300.1 million ($46.1 million), compared to RMB 719.6 million ($110.6 million) in fiscal year 2016
     
  • Earnings per diluted ADS were RMB 6.40 or $0.98, compared to RMB 14.58 or $2.24 in fiscal year 2016
     
  • Cash and cash equivalents were RMB 1.5 billion ($226.5 million), compared to RMB 2.6 billion ($394.9 million) at the end of fiscal year 2016
     
  • Non-GAAP net income attributable to the Company's ordinary shareholders was RMB 300.1 million ($46.1 million), compared to a non-GAAP net income attributable to the Company's ordinary shareholders of RMB 612.8 million ($94.2 million) in fiscal year 2016
     
  • Non-GAAP earnings per diluted ADS was RMB 6.40 ($0.98), compared to a non-GAAP earnings per diluted ADS of RMB 13.07 ($2.01) in fiscal year 2016

Mr. Baofang Jin, Chairman and CEO of JA Solar, commented, “Overall 2017 results were largely in-line with our expectations. While net revenue grew 25% year-over-year, gross margin was negatively impacted by lower ASPs and rising material costs. Additionally, higher operating expenses led to a decline in operating profits and net income in 2017 when compared to 2016.”

Mr. Jin continued, “Despite the negative impact of the Section 201 trade case, we continue to invest in R&D to develop high-performance products to strengthen our competitive position. We are confident that our technologies, high-reliability products and balanced global footprint will continue to position JA Solar for a solid future.”

Fourth Quarter 2017 Results

All shipment and financial figures refer to the quarter ended December 31, 2017, unless otherwise specified. All “year over year” or “y/y” comparisons are against the quarter ended December 31, 2016. All “sequential” comparisons are against the quarter ended September 30, 2017.

Total shipments were 2,205.9 MW, above the guidance range of 1,600 to 1,800 MW. External shipments of 2,190.9 MW increased 55.2% year over year and 35.2% sequentially.

External shipments breakdown by product (MW)

  2016Q4 2017Q3 2017Q4 QoQ% YoY%
Modules and module tolling 1,353.0 1,582.5 2,088.1 31.9% 54.3%
Cells and cell tolling 58.9 37.9 102.8 171.2% 74.5%
Total 1,411.9 1620.4 2,190.9 35.2% 55.2%
           

External shipments breakdown by region (percentage)

  2016Q4 2017Q3 2017Q4 QoQ(pp) YoY(pp)
China 58.0% 47.3% 43.3% -4.0pp -14.7pp
APAC ex-China 25.2% 16.3% 21.7% 5.4pp -3.5pp
Europe 3.3% 14.1% 7.3% -6.8pp 4.0pp
North America 7.4% 17.2% 24.5% 7.3pp 17.1pp
South America 5.6% 0.4% 0.2% -0.2pp -5.4pp
Others 0.5% 4.7% 3.0% -1.7pp 2.5pp
           

Net revenue was RMB 5.7 billion ($871.8 million), an increase of 42.1% y/y and 30.6% sequentially.

Gross profit of RMB 691.6 million ($106.3 million) increased 34.2% y/y and 34.7% sequentially. Gross margin was 12.2%, which compares to 12.9% in the year-ago quarter, and 11.8% in the third quarter of 2017.

Total operating expenses of RMB 480.9 million ($73.9 million) were 8.5% of revenue. This compares to operating expenses of 3.6% of revenue in the year-ago quarter, and 7.9% of revenue in the third quarter of 2017.

Operating profit was RMB 210.7 million ($32.4 million), compared to RMB 370.5 million ($57.0 million) in the year-ago quarter, and RMB 169.8 million ($26.1 million) in the third quarter of 2017. Operating margin was 3.7%, compared with 9.3% in the prior year period and 3.9% in the previous quarter.

Interest expense was RMB 78.2 million ($12.0 million), compared to RMB 72.9 million ($11.2 million) in the year-ago quarter, and RMB 80.3 million ($12.3 million) in the third quarter of 2017.

Earnings per diluted ADS were RMB 2.46 or $0.38, compared to earnings per diluted ADS of RMB 6.80 or $1.05 in the year-ago quarter, and earnings per diluted ADS of RMB 0.89 or $0.14 in the third quarter of 2017.

Fiscal Year 2017 Results

Fiscal year 2017 shipments were 7.6 GW, including 127.4 MW of modules to the Company’s downstream projects. External shipments of 7.5 GW represented an increase of 52.4% from 4.9 GW in fiscal year 2016.

External shipments breakdown by product (MW)

  2016 2017 YoY%
Modules and module tolling 4,606.6 7,143.1 55.1%
Cells and cell tolling 313.8 358.0 14.1%
Total 4,920.4 7,501.1 52.4%
       

External shipments breakdown by region (percentage)

  2016 2017 YoY(pp)
China 53.3% 48.4% -4.90pp
APAC ex-China 21.6% 25.6% 4.00pp
Europe 4.7% 7.8% 3.10pp
North America 9.4% 14.9% 5.50pp
South America 9.8% 0.3% -9.50pp
Others 1.2% 3.0% 1.80pp
       

Net revenue in fiscal year 2017 was RMB 19.7 billion ($3.0 billion), an increase of 25.5% from RMB 15.7 billion ($2.4 billion) in fiscal year 2016.

Total gross profit in fiscal year 2017 was RMB 2.4 billion ($370.3 million), or 12.3% of net revenue, compared with RMB 2.3 billion ($352.5 million), or 14.6% of net revenue, in fiscal year 2016.

Operating profit in fiscal year 2017 was RMB 715.7 million ($110.0 million), compared with operating profit of RMB 903.2 million ($138.8 million) in fiscal year 2016.

Net income in fiscal year 2017 was RMB 300.1 million ($46.1 million), compared with net income of RMB 719.6 million ($110.6 million) in fiscal year 2016.

In fiscal year 2017, net earnings per diluted ADS were RMB 6.40 or $0.98, compared with net earnings per diluted ADS of RMB 14.58 or $2.24 in fiscal year 2016.

Liquidity

As of December 31, 2017, the Company had cash and cash equivalents of RMB 1.5 billion ($226.5 million), and total working capital of RMB 12.6 million ($1.9 million). Total short-term borrowings were RMB 2.9 billion ($447.4 million). Total long-term borrowings were RMB 3.1 billion ($469.9 million), of which RMB 996.0 million ($153.1 million) were due in one year.

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 December 29, 2017, which was RMB 6.506 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 December 29, 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 7.6 GW of solar power products in 2017. JA Solar is headquartered in Beijing, China, and maintains production facilities in Shanghai, Hebei, Jiangsu, Inner Mongolia 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
  Dec. 31, 2016   Sep. 30, 2017   Dec. 31, 2017   Dec. 31, 2017  
  RMB'000   RMB'000   RMB'000   USD'000  
                 
Net revenues 3,990,642   4,341,718   5,672,120   871,789  
Cost of sales (3,475,213 ) (3,828,137 ) (4,980,563 ) (765,499 )
Gross profit 515,429   513,581   691,557   106,290  
Selling, general and administrative expenses (99,969 ) (302,786 ) (437,812 ) (67,290 )
Research and development expenses (44,937 ) (40,964 ) (43,047 ) (6,616 )
Total operating expenses (144,906 ) (343,750 ) (480,859 ) (73,906 )
Income from operations 370,523   169,831   210,698   32,384  
Interest expense (72,879 ) (80,283 ) (78,238 ) (12,025 )
Change in fair value of warrant derivatives 0     -      -      -   
Other income/(loss), net 95,596   (35,594 ) 6,780   1,042  
Income before income taxes 393,240   53,954   139,240   21,401  
Income tax expense (39,814 ) (12,061 ) (23,737 ) (3,648 )
Net income 353,426   41,893   115,503   17,753  
Less: loss attributable to noncontrolling interest 34,922     -      -      -   
Net income attributable to JA Solar Holdings 318,504   41,893   115,503   17,753  
         
Net income per share attributable to ordinary shareholders:        
  Basic 1.36   0.18   0.49   0.08  
  Diluted 1.36   0.18   0.49   0.08  
         
Weighted average number of shares outstanding:        
  Basic  234,290,842   234,360,842   234,361,641   234,361,641  
  Diluted 234,305,887   234,383,172   234,459,146   234,459,146  
         
Comprehensive income        
Net income 353,426   41,893   115,503   17,753  
  Foreign currency translation adjustments, net of tax (18,532 ) 3,276   661   102  
Other comprehensive (loss)/income (18,532 ) 3,276   661   102  
Comprehensive income 334,894   45,169   116,164   17,855  
Loss attributable to noncontrolling interest 34,922     -      -      -   
Comprehensive income attributable to JA Solar Holdings 299,972   45,169   116,164   17,855  
         
NON-GAAP RECONCILIATION        
         
GAAP net income attributable to JA Solar Holdings 318,504   41,893   115,503   17,753  
Change in fair value of warrant derivatives 0     -      -      -   
Non-GAAP net income attributable to JA Solar Holdings 318,504   41,893   115,503   17,753  
         
Non-GAAP net income per share attributable to ordinary shareholders:        
  Basic 1.36   0.18   0.49   0.08  
  Diluted 1.36   0.18   0.49   0.08  
         
Non-GAAP weighted average number of shares outstanding:        
  Basic 234,290,842   234,360,842   234,361,641   234,361,641  
  Diluted 234,305,887   234,383,172   234,459,146   234,459,146  
         
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  twelve months ended
  Dec. 31, 2016   Dec. 31, 2017   Dec. 31, 2017  
  RMB'000   RMB'000   USD'000  
             
Net revenues 15,736,876   19,659,454   3,021,603  
Cost of sales (13,443,335 ) (17,250,142 ) (2,651,298 )
Gross profit 2,293,541   2,409,312   370,305  
Selling, general and administrative expenses (1,214,933 ) (1,533,521 ) (235,698 )
Research and development expenses (175,450 ) (160,137 ) (24,613 )
Total operating expenses (1,390,383 ) (1,693,658 ) (260,311 )
Income from operations 903,158   715,654   109,994  
Interest expense (284,334 ) (324,413 ) (49,861 )
Change in fair value of warrant derivatives 70,882     -      -   
Other income, net 153,205   7,356   1,131  
Income before income taxes 842,911   398,597   61,264  
Income tax expenses (123,301 ) (98,470 ) (15,135 )
Net income 719,610   300,127   46,129  
Less: income attributable to noncontrolling interest 35,911     -      -   
Net income attributable to JA Solar Holdings 683,699   300,127   46,129  
       
Net income per share attributable to ordinary shareholders:      
  Basic 2.92   1.28   0.20  
  Diluted 2.92   1.28   0.20  
       
Weighted average number of shares outstanding:      
  Basic   234,290,842     234,331,621     234,331,621  
  Diluted   234,402,452     234,369,595     234,369,595  
       
Comprehensive income      
Net income 719,610   300,127   46,129  
  Foreign currency translation adjustments, net of tax (44,517 ) 4,233   651  
Other comprehensive (loss)/income (44,517 ) 4,233   651  
Comprehensive income 675,093   304,360   46,780  
Income attributable to noncontrolling interest 35,911     -      -   
Comprehensive income attributable to JA Solar Holdings 639,182   304,360   46,780  
       
NON-GAAP RECONCILIATION      
       
GAAP net income attributable to JA Solar Holdings 683,699   300,127   46,129  
Change in fair value of warrant derivatives (70,882 )   -      -   
Non-GAAP net income attributable to JA Solar Holdings 612,817   300,127   46,129  
       
Non-GAAP net income per share attributable to ordinary shareholders:      
  Basic 2.62   1.28   0.20  
  Diluted 2.61   1.28   0.20  
       
Non-GAAP weighted average number of shares outstanding:      
  Basic 234,290,842   234,331,621   234,331,621  
  Diluted 234,402,452   234,369,595   234,369,595  
       

 

 
JA Solar Holdings Co., Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
       
  Dec. 31, Dec. 31,
  2016 2017 2017
  RMB'000 RMB'000 USD'000
   
ASSETS      
Current assets:       
Cash and cash equivalents   2,569,402   1,473,455   226,466
Restricted cash   836,761   1,006,252   154,658
Accounts receivable    2,753,678   2,770,111   425,758
Notes receivable    563,144   77,995   11,988
Inventories   2,460,488   3,481,116   535,038
Advances to suppliers   282,369   321,344   49,390
Other current assets   799,314   847,705   130,290
Total current assets   10,265,156   9,977,978   1,533,588
Property and equipment, net   5,219,501   6,539,197   1,005,056
Project asset   2,338,648   2,945,613   452,732
Advances to suppliers   97,429   60,666   9,324
Prepaid land use rights   524,208   525,323   80,741
Long-term investment   69,022   67,656   10,399
Other long term assets   517,292   715,412   109,956
Total assets   19,031,256   20,831,845   3,201,796
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current liabilities:      
Short-term borrowings    2,912,866   2,910,859   447,391
Accounts payable    2,635,525   3,481,239   535,057
Advances from customers   610,718   719,016   110,511
Current portion of long term borrowings   525,256   996,010   153,084
Accrued and other liabilities    1,966,475   1,858,266   285,610
Total current liabilities   8,650,840   9,965,390   1,531,653
Long-term borrowings    2,701,438   2,061,399   316,831
Other long term liabilities   1,217,648   2,038,926   313,377
Total liabilities   12,569,926   14,065,715   2,161,861
Total JA Solar Holdings shareholders' equity   6,461,130   6,765,930   1,039,904
Noncontrolling interest   200   200   31
Total shareholders' equity   6,461,330   6,766,130   1,039,935
Total liabilities and shareholders’ equity   19,031,256   20,831,845   3,201,796
       


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