SAN FRANCISCO and WUXI, China, Aug. 20 /PRNewswire-Asia/ -- Suntech Power
Holdings Co., Ltd. (NYSE: STP), the world's largest crystalline silicon
photovoltaic (PV) module manufacturer, today announced financial results for
its second fiscal quarter ended June 30, 2009.
Second Quarter 2009 Highlights
-- Total net revenues were $321.0 million in the second quarter of 2009
-- Gross margin improved to 18.6% for the second quarter of 2009, compared
with 17.8% for the first quarter of 2009
-- Net income attributable to holders of ordinary shares was $10.0 million
or $0.06 per diluted American Depositary Share (ADS); each ADS
represents one ordinary share
-- Suntech's multi-crystalline Pluto powered module achieved world record
conversion efficiency of 15.6%
-- Suntech maintained PV cell production capacity of 1GW at the end of the
second quarter of 2009
"During the second quarter, we continued to demonstrate Suntech's ability
to adapt to fluid market conditions and improve competitiveness," said Dr.
Zhengrong Shi, Suntech's Chairman and CEO. "A seasonal pick up in demand
combined with a gradual thawing of global financial markets and improving
project returns led to sequential shipment growth in most of our major markets.
In addition, despite pricing pressure, our continued reduction of silicon
costs enabled us to improve gross margin in the second quarter."
"We are confident that the strategies that we are implementing today will
position Suntech for strong growth over the next several years. For example,
in China we are building relationships with regional governments and key
development partners in anticipation of a national feed-in tariff program. In
Japan, we have established a relationship with Yamada Denki that will expand
our distribution reach and improve brand recognition. And we are gaining
traction in emerging markets such as the Middle East through partnerships with
"In addition to our market expansion initiatives, we are making
significant progress in technology development. Suntech's multi-crystalline
Pluto module was recently accepted by the scientific journal Progress in
Photovoltaics as the world's highest conversion efficiency multi-crystalline
module with 15.6% conversion efficiency. In addition, our new state-of-the-
art PV module testing facility, which is the largest in China, will help to
enhance our efforts to deliver the most reliable and premium quality solar
products in the market."
"We remain confident that these initiatives will help us gain access to
the end consumer, improve our brand recognition, and increase our ability to
compete in a volatile macro-economy. Suntech, as a leader in both low cost
manufacturing and research and development, is well positioned to be among the
first to reach grid parity in many markets. As a result of Suntech's
competitive advantages and our downstream initiatives, we will continue to
gain market share and further our position as a leader in the rapidly evolving
RECENT BUSINESS HIGHLIGHTS
-- Suntech signed framework agreements with several provincial and city
governments in China to develop an aggregate of 1.8GW of photovoltaic
projects over the next several years.
-- Suntech has signed strategic framework agreements with China Energy
Conservation Investment Corporation (CECIC) and China Huadian New
Energy Development Co., Ltd (HNE) to develop solar projects in China.
Through these partnerships, CECIC and HNE will be primarily responsible
for project investment and development of solar projects, and Suntech
will be responsible for supplying turnkey solar solutions.
-- Suntech has established one of China's largest system integration and
project development teams with around 200 people. Suntech expects to
develop approximately 30MW of projects in the full year 2009, with the
majority in the second half.
-- Suntech signed a contract with Recurrent Energy to deliver 5MW of
modules in Q4 2009 for California's largest photovoltaic system to date.
The project will more than triple San Francisco's total municipal solar
power output from 2MW today to 7MW upon completion in 2010.
-- Suntech has narrowed the search for a U.S. production and distribution
center site to two locations and expects to make a decision within the
next few months. The new facility demonstrates Suntech's commitment to
the long term growth of the North American market.
-- Suntech recently established an agreement with Yamada Denki Co., Ltd.,
Japan's most popular consumer electronics and home appliance chain, to
sell systems incorporating Suntech modules through all of its 450
retail outlets across Japan.
-- Suntech continued to gain traction in the Middle East and was selected
by Aldar Properties PJSC to supply over 1,120 solar panels for a 292 kW
solar system for The Shams Tower, an iconic building on Yas Marina
Circuit in Abu Dhabi.
-- Suntech achieved a new world record conversion efficiency of 15.6% on a
commercial grade multi-crystalline silicon PV module. The world record
conversion efficiency was accepted by the scientific journal Progress
-- Suntech's Pluto modules recently passed all the tests for the IEC 61215
certificate. Suntech has initiated commercial shipments of Pluto-
powered modules and currently expects to ship 10MW to 15MW of Pluto
products in 2009.
-- Suntech initiated production of amorphous silicon thin film solar
panels at its facility in Shanghai. The initial panels are exhibiting
a conversion efficiency of approximately 7%.
-- Suntech opened a world-class PV module testing facility in
collaboration with Underwriters Laboratories. Through UL's Witness
Testing Data Program, PV module tests may be conducted under the
supervision of highly experienced UL personnel and subsequently awarded
certification, enabling Suntech to bring solar products to market
-- Suntech received a $50 million convertible loan from International
Finance Corporation with a conversion price of $18.00 per ADS in July
2009. The loan has a fixed rate coupon of 5.0% per annum payable on
June 15 and December 15 in each year. If not converted, the loan will
be repayable in full 7 years after the date of drawdown.
-- Suntech closed a follow-on public offering of 23,000,000 ADSs. The
aggregate amount of ADSs sold reflects the exercise in full by the
underwriters of their option to purchase up to 3,000,000 additional
ADSs to cover over-allotments. The Company received aggregate net
proceeds of $277.7 million, after the deduction of related expenses.
-- Suntech secured a $200 million syndicated loan facility from the China
Development Bank. $120 million of this facility was drawn down in the
second quarter of 2009.
-- In the second quarter of 2009 Suntech repurchased an aggregate of $30.8
million principal amount of its 0.25% Convertible Senior Notes due 2012
for a total consideration of $29.1 million. As of June 30, 2009,
Suntech had $225.0 million principal amount of 2012 convertible notes
Second Quarter 2009 Results
Total net revenues for the second quarter of 2009 were $321.0 million, an
increase of 1.7% from $315.7 million in the first quarter of 2009.
Total net revenues from the investee companies of GSF were $15.3 million
in the second quarter of 2009 compared with $100.5 million in the first
quarter. Sales to the investee companies of GSF were conducted under terms
comparable to those with unrelated parties, and the revenue and profit related
to the sales activities during the second quarter of 2009 were fully
recognized during the same period.
For the second quarter of 2009, gross profit was $59.7 million and gross
margin was 18.6% compared to gross profit of $56.3 million and gross margin of
17.8% in the first quarter of 2009. The increase in gross profit was
primarily due to Suntech's silicon wafer cost and total cost structure falling
faster than sales price in the second quarter of 2009.
Operating expenses for the second quarter of 2009 were $38.6 million
compared to $35.1 million in the first quarter of 2009. The increase was
primarily due to additional hires to improve sales and marketing efforts and a
bad debt provision.
Income from operations was $21.1 million for the second quarter of 2009,
which was flat with the first quarter of 2009.
Net interest expense was $24.3 million in the second quarter of 2009
compared to net interest expense of $21.6 million in the first quarter of 2009.
Net interest expense in the second quarter of 2009 includes $11.6 million of
non-cash interest expenses of which $10.3 million was related to the adoption
of FASB Staff Position No APB14-1, "Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial
Cash Settlement)" ("FSP APB14-1").
Foreign currency exchange gain was $17.5 million in the second quarter of
2009 compared to a loss of $6.2 million in the first quarter of 2009. The
foreign currency gain in the second quarter was primarily related to the
appreciation of the Euro versus the USD.
Net other expense was $2.5 million in the second quarter of 2009, compared
with $12.6 million of net other income in the first quarter of 2009. The net
other income in the first quarter of 2009 was mainly due to $9.3 million in
gains from repurchases of the 2012 convertible senior notes and $3.2 million
in gains from mark-to-market valuation of foreign exchange forward contracts.
The net other expense in the second quarter was primarily due to a loss from
mark-to-market valuation of foreign exchange forward contracts.
Net income attributable to holders of ordinary shares for the second
quarter of 2009 was $10.0 million, or $0.06 per diluted ADS compared to a net
income of $1.8 million, or $0.01 per diluted ADS, in the first quarter of 2009.
In the second quarter of 2009, the major non-cash related expenses were
share-based compensation charges of $4.2 million; $11.6 million of non-cash
interest expenses; and depreciation and amortization expenses of $14.4 million.
In the second quarter of 2009, capital expenditures, which were primarily
for the construction of the thin film production facilities in Shanghai, and
to retrofit existing production capacity to enable production of PV modules
based on our high efficiency Pluto technology, totaled $20.9 million.
Cash and cash equivalents increased to $760.5 million as of June 30, 2009
from $406.0 million as of March 31, 2009. The increase was primarily due to
the follow-on public offering of 23 million ADSs during the quarter from which
we received aggregate net proceeds of $277.7 million and an increase in long
term bank borrowings due to a syndicated loan of $120 million from the China
Accounts receivable was $292.1 million as of June 30, 2009, compared with
$265.4 million as of March 31, 2009. The increase was primarily due to an
increase in credit terms in line with industry trends.
Accounts receivable due from investee companies of GSF was $108.4 million
as of June 30, 2009, compared with $104.9 million as of March 31, 2009.
Suntech has been closely monitoring the settlement on this account receivable
and expects full collection on this account receivable will be made no later
than the end of 2009.
Suntech expects third quarter 2009 shipments to be more than 50% above the
second quarter 2009. Gross margin in the third quarter of 2009 is expected to
be relatively flat compared to the second quarter of 2009.
Suntech expects shipments in the fourth quarter of 2009 to be slightly
lower than the third quarter of 2009 due to seasonality. As a result, Suntech
has revised full-year 2009 shipment expectations to approximately 600MW.
Suntech intends to hold PV cell production capacity at 1GW in 2009 until
demand visibility improves. Suntech expects capital expenditures to be in the
range of $100 million to $120 million in 2009.
Second Quarter 2009 Conference Call Information
Suntech management will host a conference call today, Thursday, August 20,
2009 at 8:00a.m. U.S. Eastern Time (which corresponds to 8:00p.m. Beijing/Hong
Kong time and 12:00p.m. Greenwich Mean Time on August 20, 2009) to discuss the
To enhance presentation of information and data during the conference call,
Suntech has provided a set of PowerPoint slides which are posted on the main
page of the Investor Center of Suntech's website at
To access the conference call, please dial +1-617-597-5310 (for U.S.
callers/ international callers) or +852-3002-1672 (for HK callers) and ask to
be connected to the Suntech earnings conference call. A live and archived
webcast of the conference call will be available on Suntech's website at
http://www.suntech-power.com under Investor Center: Financial Events.
A telephonic replay of the conference call will be available until
September 3, 2009 by dialing +1-617-801-6888 (passcode: 15504914).
Suntech Power Holdings Co., Ltd. (NYSE: STP) is the world's leading solar
energy company as measured by production output of crystalline silicon solar
modules. Suntech designs, develops, manufactures, and markets premium-quality,
high-output, cost-effective and environmentally friendly solar products for
electric power applications in the residential, commercial, industrial, and
public utility sectors. Suntech's patent-pending Pluto technology for
crystalline silicon solar cells improves power output by up to 12% compared to
conventional production methods.
Suntech also offers one of the broadest ranges of building-integrated
solar products under the MSK Solar Design Line(TM). Suntech designs and
delivers commercial and utility scale solar power systems through its wholly
owned subsidiary Suntech Energy Engineering and will own and operate projects
greater than 10 megawatts in the United States through Gemini Solar
Development Company, a joint venture with Renewable Ventures, a Fotowatio
company. With regional headquarters in China, Switzerland and San Francisco
and sales offices worldwide, Suntech is passionate about improving the
environment we live in and dedicated to developing advanced solar solutions
that enable sustainable development. For more information, please visit
Safe Harbor Statement
This press release contains forward-looking statements. These statements
constitute "forward-looking" statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and as defined in the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking statements
can be identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar statements,
and includes our ability to ensure our initiatives help us to gain access to
the end consumer, improve our brand recognition and improve our ability to
compete; our ability to reach grid parity; our ability to develop PV projects
based upon our signed framework agreements with various governments, CECIC and
HNE; our ability to bring products faster to market under the UL Witness
Testing Data Program; our expected Pluto production capacity and volume of
Pluto shipments in 2009; our ability to collect receivables from GSF investee
companies by the of 2009; and our outlook for Q3 revenue and gross margin and
full year shipments and capital expenditures. Such statements involve certain
risks and uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. Further information regarding
these and other risks is included in Suntech's filings with the U.S.
Securities and Exchange Commission, including its annual report on Form 20-F.
Suntech does not undertake any obligation to update any forward-looking
statement as a result of new information, future events or otherwise, except
as required under applicable law.
Note: The quarterly consolidated income statements are unaudited. The
condensed consolidated balance sheets are derived from Suntech's unaudited
consolidated financial statements. Effective January 1, 2009, as a result of
the adoption of Statement of Financial Accounting Standards, or SFAS 160,
Non-controlling Interests in Consolidated Financial Statements - An Amendment
of ARB No. 51.and FASB Staff Position No. APB 14-1, Accounting for Convertible
Debt Instruments that May be Settled in Cash upon Conversion (Including
Partial Cash Settlement), our condensed consolidated income statement for the
three months ended June 30, 2008 has been re-casted for comparable purpose.
The following tables set forth the unaudited condensed consolidated balance
sheet as of March 31, 2009 and June 30, 2009, the adjusted unaudited condensed
consolidated income statement for the three months ended June 30, 2008, and
the unaudited condensed consolidated income statements for the three months
ended March 31, 2009 and June 30, 2009.
SUNTECH POWER HOLDINGS CO., LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
As of As of
March 31, June 30,
Cash and cash equivalents 405,995 760,544
Restricted cash 179,134 180,369
Inventories 242,690 269,705
Accounts receivable - Investee
companies of GSF 104,940 108,410
Accounts receivable - Others 160,414 183,735
Value-added tax recoverable 87,099 78,433
Advances to suppliers 70,513 53,824
Other current assets 255,477 200,790
Total current assets 1,506,262 1,835,810
Property, plant and equipment, net 720,821 733,684
Intangible assets, net 163,619 165,221
Goodwill 80,930 83,566
Investments in affiliates 225,358 229,080
Long-term prepayments 195,346 181,992
Long-term loan to suppliers 56,150 55,882
Amount due from related parties 216,387 203,636
Other non-current assets 104,112 102,642
TOTAL ASSETS 3,268,985 3,591,513
LIABILITIES AND EQUITY
Short-term borrowings, including
current portion of long-term bank
borrowings 791,706 806,833
Accounts payable 153,382 120,130
Convertible notes-current 239,341 214,781
Other current liabilities 228,893 178,607
Total current liabilities 1,413,322 1,320,351
Long-term bank borrowings 17,486 136,174
Convertible notes-non-current 446,964 453,746
Accrued warranty costs 43,025 45,630
Other long-term liabilities 119,861 115,435
Total liabilities 2,040,658 2,071,336
Total equity 1,228,327 1,520,177
TOTAL LIABILITIES AND EQUITY 3,268,985 3,591,513
SUNTECH POWER HOLDINGS CO., LTD.
CONSOLIDATED INCOME STATEMENT
(In $'000, except share, per share, and per ADS data)
Three Three Three
months months months
ended ended ended
June 30, March 31, June 30,
2008 2009 2009
Total net revenues 480,179 315,656 320,959
- Investee companies of GSF -- 100,547 15,298
- Others 480,179 215,109 305,661
Total cost of revenues 364,382 259,369 261,263
Gross profit 115,797 56,287 59,696
Selling expenses 14,751 11,401 11,501
General and administrative expenses 20,318 18,820 22,808
Research and development expenses 3,310 4,923 4,322
Total operating expenses 38,379 35,144 38,631
Income from operations 77,418 21,143 21,065
Interest expenses (26,825) (26,743) (25,884)
Interest income 8,653 5,098 1,577
Foreign exchange gain/(loss) 2,493 (6,191) 17,530
Other (expense) income (6,329) 12,567 (2,546)
Income before income taxes 55,410 5,874 11,742
Tax (provision)/benefit (3,517) 78 168
Net income after taxes before
noncontrolling interest and equity
in earnings of affiliates 51,893 5,952 11,910
Equity in loss of affiliates -- (3,874) (2,293)
Net income 51,893 2,078 9,617
Add: Net loss (income) attributable
to non-controlling interest 356 (292) 357
Net income attributable to holders
of ordinary shares 52,249 1,786 9,974
Net income attributable to ordinary
shareholders per share and per
- Basic 0.34 0.01 0.06
- Diluted 0.31 0.01 0.06
Shares and ADSs used in
- Basic 153,935,960 155,881,265 164,483,191
- Diluted 185,244,933 156,794,603 172,611,156
Each ADS represents one ordinary share
For further information, please contact:
Investor Relations Director
In the United States:
Executive Vice President
The Piacente Group, Inc. (Investor Relations Counsel, Suntech)