Yingli Green Energy Reports Third Quarter 2009 Results
BAODING,
Holding Company Limited (NYSE: YGE) (“Yingli Green Energy” or the “Company”),
one of the world’s leading vertically integrated photovoltaic (“PV”) product
manufacturers, today announced its unaudited consolidated financial results
for the quarter ended
Third Quarter 2009 Consolidated Financial and Operating Highlights
-- Total net revenues were RMB 2,225.2 million (US$326.0 million) and PV
module shipment volume increased more than 80% quarter over quarter.
-- Gross profit was RMB 447.6 million (US$65.6 million), with a gross
margin of 20.1%.
-- Operating income was RMB 242.8 million (US$35.6 million), with an
operating margin of 10.9 %.
-- Net income(1) was RMB 120.8 million (US$17.7 million) and diluted
earnings per ordinary share and per American depositary share ("ADS")
was RMB 0.79 (US$0.12).
-- On an adjusted Non-GAAP(2) basis, net income was RMB 184.2 million
(US$27.0 million) and diluted earnings per ordinary share and per ADS
was RMB 1.20 (US$0.18).
“I am pleased to announce strong results for the third quarter, with
record highs in shipment volume and net revenues and healthy growth in net
income,” said Mr.
Yingli Green Energy. “The main driving force for these results was increased
market demand for our ‘Yingli Solar’ brand products as the solar project
financing environment continued to improve and as we began to see the benefits
of our recently implemented competitive pricing strategy, which leverages our
favorable cost structure. Additionally, our continuous focus on high quality
products and customer service enabled us to continue to expand our market
share and raise recognition of our products in both established and emerging
solar markets during the quarter, which we expect will help drive growth in
the quarters to come.”
“I am also very pleased to report that our gross margin continued to
increase, reaching 20.1% in the third quarter from 18.3% in the second quarter
of 2009 and 15.3% in the first quarter of 2009, underlining our ability to
improve profitability by reducing both polysilicon and processing costs while
achieving significant shipment volume growth,” Mr. Miao continued.
Mr. Miao concluded, “To maintain our leading position, we will continue to
focus on research and development and integrating our value chain. I am
pleased to report that Project PANDA has achieved its first phase target ahead
of schedule, producing next-generation cells with an average conversion
efficiency rate of 18% or higher on our pilot production line. Also of note,
our in-house polysilicon manufacturing plant, Fine Silicon, is set to begin
trial production in
one of a limited number of PV manufacturers in the world with a fully
vertically integrated business model, covering the manufacturing process from
polysilicon to PV modules. In addition, we will be the first vertically
integrated PV product manufacturer in the world to have all of our production
facilities located on one site. We believe this will enable us to further
optimize our cost structure and capture profit at nearly every stage of the PV
industry value chain, thus driving profitability and allowing us to better
serve our global customer base.”
Third Quarter 2009 Financial Results
Total Net Revenues
Total net revenues were
third quarter of 2009, an increase of 48.5% from
second quarter of 2009 and a slight increase from
third quarter of 2008. The increase from the second quarter of 2009 was
primarily due to the more than 80% increase in PV module shipment volume
resulting from the improved credit environment in major PV markets, increased
brand awareness, continued promotional efforts and improved product
bankability, and was partially offset by a lower average selling price.
Gross Profit and Gross Margin
Gross profit in the third quarter of 2009 was
million
2009 and a decrease of 9.1% from
2008. Gross margin was 20.1% in the third quarter of 2009, up from 18.3% in
the second quarter of 2009 and down from 22.3% in the third quarter of 2008.
The increase in gross margin from the second quarter of 2009 was primarily due
to the decrease in the blended cost of polysilicon as a result of lower
polysilicon purchase prices and consumption of comparatively higher priced
polysilicon inventory as well as decreasing polysilicon usage per watt and
lower non-polysilicon cost in the third quarter of 2009.
Operating Expenses
Operating expenses in the third quarter of 2009 were
(
and
expenses from the second quarter of 2009 was primarily attributable to the
increase in selling expenses and general and administrative expenses
consistent with the large increase in PV module shipment volume, as well as
higher research and development expenses in connection with the progress of a
series of research and development initiatives, including Project PANDA.
Operating expenses as a percentage of total net revenues were 9.2% in the
third quarter of 2009, compared to 11.1% in the second quarter of 2009 and
5.2% in the third quarter of 2008. The decrease in operating expenses as a
percentage of total net revenues from the second quarter of 2009 was mainly
due to the increase in total net revenues.
Operating Income and Margin
Operating income in the third quarter of 2009 was
(
quarter of 2009 and a decrease of 35.6% from
quarter of 2008. Operating margin was 10.9% in the third quarter of 2009,
compared to 7.1% in the second quarter of 2009 and 17.1% in the third quarter
of 2008. The increase in operating margin from the second quarter of 2009 was
mainly due to increased gross margin and decreased operating expenses as a
percentage of net revenues.
Interest Expense
Interest expense was
quarter of 2009, compared to
and
After excluding non-cash interest expenses, interest expense was
million
million
quarter of 2008. The weighted average interest rate for the borrowings in the
third quarter of 2009 was 6.66%, a decrease from 6.88% in the second quarter
of 2009, both measured on a basis excluding non-cash interest expenses. The
decrease in weighted average interest rate was a result of the Company’s
efforts to reduce funding costs.
Foreign Currency Exchange Gain
Foreign currency exchange gain was
the third quarter of 2009, compared to a foreign currency exchange gain of
108.7 million
loss of
exchange gain in the third quarter of 2009 was primarily due to the
appreciation of the Euro against the Renminbi.
Income Tax Expense
Income tax expense was
quarter of 2009, compared to an income tax expense of
second quarter of 2009 and an income tax benefit of
third quarter of 2008. The increase in income tax expense from the second
quarter of 2009 was primarily attributable to the increased net operating
income generated by Tianwei Yingli. Under the PRC Enterprise Income Tax Law
and the various implementation rules, Tianwei Yingli was subject to an
enterprise income tax rate of 0% in 2008 and 12.5% in 2009, and Yingli Energy
(
Company, was subject to an enterprise income tax rate of 15% in both 2008 and
2009.
Net Income
As a result of the factors discussed above, net income was
million
of
million
per ADS was
diluted loss per ordinary share and per ADS of
of 2009.
On an adjusted non-GAAP basis, net income was
million
income of
diluted earnings per ordinary share and per ADS was
third quarter of 2009, compared to adjusted non-GAAP diluted earnings per
ordinary share and per ADS of
Balance Sheet Analysis
As of
(
(
and restricted cash, and
2009
Long-term bank borrowings decreased to
million
and short-term borrowings increased to
as of
change in the balances of long-term bank borrowings and short-term borrowings
in the third quarter was primarily due to the reclassification of long-term
bank borrowings and short-term borrowings.
As of the date of this press release, the Company had approximately
7,623 million
been utilized.
Business Outlook for Full Year 2009
Given the strong third quarter results and greater visibility into market
demand for the fourth quarter, the Company is updating its annual PV module
shipment target to be in the estimated range of 490 MW to 500 MW from the
previous expected range of 450 MW to 500 MW for fiscal year 2009, which
represents an increase of 74.0% to 77.6% compared to fiscal year 2008.
In addition, the Company is updating its gross margin target for fiscal
year 2009 to be in the estimated range of 19% to 20% from the previous
expected range of 18% to 20%.
Non-GAAP Financial Measures
To supplement the financial measures calculated in accordance with GAAP,
this press release includes certain non-GAAP financial measures of adjusted
net income (loss) and adjusted diluted earnings (loss) per ordinary share and
per ADS, each of which is adjusted to exclude items related to share-based
compensation, accretion of the non-cash interest expense resulting from the
derivative liabilities bifurcated from the Company’s convertible notes issued
in
notes issued in
with a loan facility provided by ADM Capital in
equity component bifurcated from the Company’s convertible notes issued in
the non-cash interest expense in connection with the conversion of the
Company’s convertible notes issued in
expense in connection with the change in the fair value of interest rate swap
entered into in
from the early full repayment of ADM Capital loan, the subsequent non-cash
changes in the fair value of the derivative liabilities and amortization of
intangible assets arising from purchase price allocation in connection with a
series of acquisitions of equity interests in Tianwei Yingli. The Company
believes excluding these items from its non-GAAP financial measures is useful
for its management and investors to assess and analyze the Company’s core
operating results as such items are not directly attributable to the
underlying performance of the Company’s business operations and do not impact
its cash earnings. The Company also believes these non-GAAP financial
measures are important to help investors understand the Company’s current
financial performance and future prospects and compare business trends among
different reporting periods on a consistent basis. These non-GAAP financial
measures should be considered in addition to financial measures presented in
accordance with GAAP, but should not be considered as a substitute for, or
superior to, financial measures presented in accordance with GAAP. For a
reconciliation of each of these non-GAAP financial measures to the most
directly comparable GAAP financial measure, please see the financial
information included elsewhere in this press release.
Currency Conversion
Solely for the convenience of readers, certain Renminbi amounts have been
translated into U.S. dollar amounts at the rate of
noon buying rate in
as set forth in the H.10 weekly statistical release of the Federal Reserve
Board, as of
the Renminbi amounts could have been, or could be, converted, realized or
settled into U.S. dollar amounts at such rate, or at any other rate. The
percentages stated in this press release are calculated based on Renminbi.
Conference Call
Yingli Green Energy will host a conference call and live webcast to
discuss the results at
13, 2009
The dial-in details for the live conference call are as follows:
-- U.S. Toll Free Number: +1-800-291-9234
-- International dial-in number: +1-617-614-3923
-- Passcode: 82289455
A live and archived webcast of the conference call will be available on
the Investors section of Yingli Green Energy’s website at
http://www.yinglisolar.com . A replay will be available shortly after the
call on Yingli Green Energy’s website for 90 days.
A replay of the conference call will be available until
by dialing:
-- U.S. Toll Free Number: +1-888-286-8010
-- International dial-in number: +1-617-801-6888
-- Passcode: 45378350
About Yingli Green Energy
Yingli Green Energy Holding Company Limited (NYSE: YGE) is one of the
world’s leading vertically integrated PV product manufacturers. Yingli Green
Energy designs, manufactures and sells PV modules and designs, assembles,
sells and installs PV systems that are connected to an electricity
transmission grid or operate on a stand-alone basis. Based in Baoding,
Yingli Green Energy sells its PV modules to system integrators and
distributors located in various markets around the world, including
more information, please visit http://www.yinglisolar.com .
Safe Harbor Statement
This press release contains forward-looking statements. These statements
constitute “forward-looking” statements within the meaning of 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,” “target”
and similar statements. Such statements are based upon management’s current
expectations and current market and operating conditions, and relate to events
that involve known or unknown risks, uncertainties and other factors, all of
which are difficult to predict and many of which are beyond Yingli Green
Energy’s control, which may cause Yingli Green Energy’s actual results,
performance or achievements to differ materially from those in the forward-
looking statements. Further information regarding these and other risks,
uncertainties or factors is included in Yingli Green Energy’s filings with the
U.S. Securities and Exchange Commission. Yingli Green Energy 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.
(1) Upon adoption of FASB Statement 160 ("SFAS 160"), effective January 1,
2009, net income (loss) has been adjusted to include net income (loss)
attributed to non-controlling interests and Yingli Green Energy. For
convenience purposes, all references to "net income (loss)" in this
press release, unless otherwise specified, represent "net income (loss)
attributable to Yingli Green Energy" for all periods presented.
(2) All non-GAAP measures exclude share-based compensation, accretion of
non-cash interest expenses resulting from the derivative liabilities
bifurcated from the Company's convertible notes issued in January 2009,
from the beneficial conversion feature recognized from the convertible
notes issued in July 2009, from the freestanding warrants issued in
connection with a loan facility provided by a fund managed by Asia
Debt Management Hong Kong Limited ("ADM Capital") in April 2009, and
from the equity component bifurcated from the Company's convertible
notes issued in December 2007 upon the adoption and retroactive
application of Financial Accounting Standards Board Staff Position
Accounting Principles Board 14-1 ("FSP APB14-1"), "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement)", the non-cash interest
expense in connection with the conversion of the Company's convertible
notes issued in January 2009, the non-cash interest expense in
connection with the change in the fair value of interest rate swap
entered into in June 2009, the non-cash loss on debt extinguishment
resulting from the early full repayment of the ADM Capital loan, the
subsequent non-cash expense in the fair value of the derivative
liabilities and amortization of intangible assets arising from
purchase price allocation in connection with a series of acquisitions
of equity interests in Baoding Tianwei Yingli New Energy Resources Co.,
Ltd. ("Tianwei Yingli"), an operating subsidiary of the Company. For
further details on non-GAAP measures, please refer to the
reconciliation table and a detailed discussion of the Company's use of
non-GAAP information set forth elsewhere in this press release.
(3) The Company's previously reported unaudited third quarter 2008
financial results have been revised to reflect an increase in interest
expense from RMB 31.6 million to RMB 34.8 million in the third quarter
of 2008 due to the adoption and retroactive application of FSP APB 14-
1, "Accounting for Convertible Debt Instruments That May Be Settled in
Cash upon Conversion (Including Partial Cash Settlement)."
For further information, please contact:
In China:
Qing Miao
Director, Investor Relations
Yingli Green Energy Holding Company Limited
Tel: +86-312-3100-502
Email: ir@yinglisolar.com
Courtney Shike
Brunswick Group LLC
Tel: +86-10-6566-2256
Email: cshike@brunswickgroup.com
In the United States:
Katie Cralle
Brunswick Group LLC
Tel: +1-212-333-3810
Email: kcralle@brunswickgroup.com
YINGLI GREEN ENERGY HOLDING COMPANY LIMITED AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
December 31,
2008
(As adjusted)(1) September 30, 2009
RMB RMB US$
ASSETS
Current assets:
Cash and restricted cash 1,218,148 2,657,583 389,321
Accounts receivable, net 1,464,973 2,692,593 394,450
Inventories 2,040,731 1,749,987 256,363
Prepayments to suppliers 774,014 419,716 61,486
Prepaid expenses and other
current assets 563,267 608,499 89,142
Total current assets 6,061,133 8,128,378 1,190,762
Prepayments to suppliers 674,164 672,994 98,590
Property, plant and equipment,
net 3,385,682 6,273,888 919,089
Land use rights 63,022 267,519 39,190
Goodwill and intangible assets,
net 666,429 625,583 91,645
Investments in and advances to
affiliates, including an
acquisition deposit 192,537 21,372 3,131
Other assets 24,829 19,124 2,801
Total assets 11,067,796 16,008,858 2,345,208
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Short-term bank borrowings,
including current portion
of long-term bank borrowings 2,044,200 3,142,810 460,404
Accounts payable 628,903 1,355,637 198,593
Other current liabilities and
accrued expenses 84,563 255,432 37,419
Advances from customers 51,933 41,398 6,065
Dividend payable 10,956 10,956 1,605
Other amounts due to related
parties, including an
entrusted loan 8,864 276,818 40,552
Total current liabilities 2,829,419 5,083,051 744,638
Convertible senior notes 1,214,814 1,272,451 186,407
Senior secured convertible notes -- 71,611 10,491
Long-term bank borrowings,
excluding current portion 662,956 1,107,506 162,243
Accrued warranty cost, excluding
current portion 114,691 156,201 22,883
Other liabilities 73,646 72,986 10,692
Total liabilities 4,895,526 7,763,806 1,137,354
Shareholders' equity:
Ordinary shares 9,922 11,353 1,663
Additional paid-in capital 3,724,358 6,146,494 900,427
Accumulated other comprehensive
income 31,206 18,442 2,702
Retained earnings 1,011,633 597,233 87,491
Total Yingli Green Energy
shareholders' equity 4,777,119 6,773,522 992,283
Noncontrolling interests 1,395,151 1,471,530 215,571
Total shareholders' equity 6,172,270 8,245,052 1,207,854
Total liabilities and
shareholders' equity 11,067,796 16,008,858 2,345,208
(1) Reflects retrospective application of SFAS 160, "Noncontrolling
Interests in Consolidated Financial Statements-an amendment of ARB
No.51." and retrospective application of FSP APB 14-1, "Accounting
for Convertible Debt Instruments that May be Settled in Cash upon
Conversion (Including Partial Cash Settlement)."
YINGLI GREEN ENERGY HOLDING COMPANY LIMITED AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except for share, ADS, per share and per ADS data)
Three months ended
September 30, June 30, September 30,
2008 2009 2009
(As adjusted)(1)
RMB RMB RMB US$
Net revenues:
Sales of PV modules 2,193,203 1,460,715 2,210,404 323,812
Sales of PV systems 2,809 32,813 1,303 191
Other revenues 13,765 5,374 13,499 1,978
Total net revenues 2,209,777 1,498,902 2,225,206 325,981
Cost of revenues:
Cost of PV modules
sales (1,710,361) (1,193,400) (1,765,289) (258,605)
Cost of PV systems
sales (2,047) (26,626) (946) (139)
Cost of other
revenues (4,731) (5,089) (11,390) (1,669)
Total cost of
revenues (1,717,139) (1,225,115) (1,777,625) (260,413)
Gross profit 492,638 273,787 447,581 65,568
Selling expenses (35,347) (39,626) (47,992) (7,031)
General and
administrative
expenses (60,458) (81,233) (101,903) (14,928)
Research and
development
expenses (19,702) (46,130) (54,880) (8,039)
Total operating
expenses (115,507) (166,989) (204,775) (29,998)
Income from
operations 377,131 106,798 242,806 35,570
Other income
(expense):
Interest expense (34,782) (115,923) (100,565) (14,732)
Interest income 2,067 830 1,303 191
Foreign currency
exchange gain
(loss) (133,056) 108,710 71,788 10,517
Loss on debt
extinguishment -- (244,745) -- --
Loss on derivative
liabilities -- (204,246) -- --
Other income 581 836 3,113 455
Earnings (loss)
before income
taxes 211,941 (347,740) 218,445 32,001
Income tax benefit
(expense) 234 (15,998) (31,031) (4,546)
Net income (loss) 212,175 (363,738) 187,414 27,455
Less: Earnings
attributable to
the noncontrolling
interests (64,545) (29,943) (66,568) (9,752)
Net income (loss)
attributable to
Yingli Green Energy 147,630 (393,681) 120,846 17,703
Weighted average
shares and ADSs
outstanding
Basic 127,447,821 130,044,300 148,379,700 148,379,700
Diluted 129,410,578 130,044,300 153,660,518 153,660,518
Earnings (loss) per
share and per ADS
Basic 1.16 (3.03) 0.81 0.12
Diluted 1.14 (3.03) 0.79 0.12
Reconciliation of Non-GAAP measures to GAAP measures
Three months ended
September 30, June 30, September 30,
2008 2009 2009
RMB RMB RMB US$
Non-GAAP income attributable
to Yingli Green Energy 175,307 119,794 184,241 26,990
Share-based compensation
attributable to Yingli
Green Energy (10,854) (14,721) (15,990) (2,342)
Amortization of intangible
assets attributable to
Yingli Green Energy (13,639) (12,971) (15,058) (2,206)
Loss on derivative
liabilities attributable
to Yingli Green Energy -- (204,246) -- --
Loss on debt extinguishment
attributable to Yingli
Green Energy -- (244,745) -- --
Non-cash interest expenses
attributable to Yingli
Green Energy (3,184) (36,792) (32,347) (4,739)
Net income (loss)
attributable to Yingli
Green Energy 147,630 (393,681) 120,846 17,703
Non-GAAP diluted earnings per
share and per ADS 1.34 0.91 1.20 0.18
Share-based compensation per
share and per ADS (0.08) (0.11) (0.10) (0.01)
Amortization of intangible
assets per share and per ADS (0.10) (0.10) (0.10) (0.01)
Loss on derivative
liabilities per share and
per ADS -- (1.57) -- --
Loss on debt extinguishment
per share and per ADS -- (1.88) -- --
Non-cash interest expenses
per share and per ADS (0.02) (0.28) (0.21) (0.04)
Diluted earnings (loss) per
share and per ADS 1.14 (3.03) 0.79 0.12
SOURCE Yingli Green Energy Holding Company Limited