LDK Solar Reports Financial Results for Fourth Quarter of Fiscal 2012
XINYU CITY, China and SUNNYVALE, Calif., April 18, 2013 /PRNewswire/ -- LDK Solar Co., Ltd. ("LDK Solar"; NYSE: LDK), a leading vertically integrated manufacturer of photovoltaic products, today reported its unaudited financial results for the fourth quarter ended December 31, 2012.
All financial results are reported in U.S. dollars on a U.S. GAAP basis.
Fourth Quarter Highlights:
- Net sales of $135.9 million; and
- Shipped 184.7 megawatts (MW) of wafers, 69.1 MW of cells and modules in the fourth quarter.
Net sales for the fourth quarter of fiscal 2012 were $135.9 million, compared to $291.5 million for the third quarter of fiscal 2012, and $420.2 million for the fourth quarter of fiscal 2011.
Gross loss for the fourth quarter of fiscal 2012 was $82.2 million, compared to gross loss of $32.5 million in the third quarter of fiscal 2012, and gross loss of $275.2 million for the fourth quarter of fiscal 2011.
Gross margin for the fourth quarter of fiscal 2012 was negative 60.5%, compared to negative 11.2% in the third quarter of fiscal 2012, and negative 65.5% in the fourth quarter of fiscal 2011.
During the preparation of its fourth quarter 2012 financial results, LDK Solar's management determined that an inventory write-down of $25.1 million was required as a result of a continuous weakness in market price for polysilicon, wafers, cells, modules and PV projects caused by industry-wide over capacity and much heated market competition. As a result, gross margin and results from operations were negatively impacted in the fourth quarter of fiscal 2012.
Loss from operations for the fourth quarter of fiscal 2012 was $408.7 million, compared to loss from operations of $75.7 million for the third quarter of fiscal 2012, and loss from operations of $531.4 million for the fourth quarter of fiscal 2011. During the fourth quarter of 2012, LDK Solar's management determined that a provision for doubtful trade receivables and a loss on prepayments of $50.6 million was required in view of the deteriorating solar market which negatively affected our customers and suppliers, of which $12.1 million was incurred in our subsidiary located in Hefei City. The Company also made a non-cash provision totaling $46.7 million for an arbitration decision made against the Company by the China International Economic and Trade Arbitration Commission in favor of Beijing Jingyuntong Technology Co., Ltd..
During the fourth quarter of 2012, LDK Solar's management made the decision to sell its subsidiary in Hefei, Anhui Province. The assets and liabilities of this Hefei subsidiary were classified as held for sale and liabilities directly associated with assets classified as held for sale respectively, and $74.2 million of impairment loss on assets held for sale was recorded for the excess of carrying amount to fair value less cost to sell. Additionally, LDK Solar's management determined that an impairment loss for property, plant and equipment of $78.2 million and an impairment loss for goodwill and intangible assets of $26.7 million were required to reflect the decline in solar industry and change of business plan of certain production facilities.
Operating margin for the fourth quarter of fiscal 2012 was negative 300.8% compared to negative 26.0% in the third quarter of fiscal 2012, and negative 126.5% in the fourth quarter of fiscal 2011.
Income tax expense for the fourth quarter of fiscal 2012 was $73.5 million, compared to income tax benefit of $25.4 million in the third quarter of fiscal 2012 and income tax benefit of $45.1 million in the fourth quarter of fiscal 2011. The increase in income tax expense during the fourth quarter of fiscal 2012 was mainly because of a valuation allowance for deferred tax assets.
Net loss available to LDK Solar's shareholders for the fourth quarter of fiscal 2012 was $517.0 million, or a loss of $3.68 per diluted ADS, compared to net loss of $136.9 million, or a loss of $1.08 per diluted ADS for the third quarter of fiscal 2012 and net loss of $588.7 million, or a loss of $4.63 per diluted ADS for the fourth quarter of fiscal 2011. The weighted average number of shares for calculating diluted ADS was approximately 140.4 million for the fourth quarter of fiscal 2012.
LDK Solar ended the fourth quarter of fiscal 2012 with $98.3 million in cash and cash equivalents and $167.2 million in short-term pledged bank deposits.
"Our business continued to be affected by the significant challenges that remained pervasive throughout the solar industry," stated Xingxue Tong, President and CEO of LDK Solar. "Our fourth quarter results reflect the industry-wide overcapacity and resulting pressure to ASP's and margins. Amidst these challenging market conditions, we are dedicated to working closely with our stakeholders and the relevant governmental agencies to adapt our strategy to position LDK Solar for recovery and long-term growth.
"In 2013, we are focused on emerging solar markets in China, Africa, India and the United States. We believe these markets represent the strongest growth potential. We will also continue to focus on improving our cost structure by further driving down production costs and tightly managing our operating expenses. While the weak demand environment is expected to persist in the near-term, we continue to believe that the considerable opportunities to meet global energy needs with solar power will drive long-term market growth," concluded Mr. Tong.
Business Outlook
The following statements are based upon management's current expectations. These statements are forward-looking in nature, and the actual results may differ materially. You should read the "Safe Harbor Statement" below with respect to the risks and uncertainties relating to these forward-looking statements.
For the first quarter of fiscal 2013, LDK Solar estimates its revenue to be in the range of $80 million to $100 million, wafer shipments between 260 MW and 270 MW and cell and module shipments between 30 MW and 40 MW.
Conference Call Details
The LDK Solar Fourth Quarter 2012 teleconference and webcast is scheduled to begin at 8:00 a.m. Eastern Time (ET), on April 18, 2013. To listen to the live conference call, please dial 877-941-1427 (within U.S.) or 480-629-9664 (outside U.S.) at 8:00 a.m. ET on April 18, 2013. An audio replay of the call will be available through April 28, 2013, by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering the pass code 4610990#.
A live webcast of the call will be available on the company's investor relations website at http://investor.ldksolar.com
| LDK Solar Co., Ltd. Unaudited Condensed Consolidated Balance Sheet Information (In US$'000) |
|||||
| 12/31/2012 |
09/30/2012 |
||||
| Assets |
|||||
| Current assets |
|||||
| Cash and cash equivalents |
98,283 |
111,859 |
|||
| Pledged bank deposits |
167,185 |
340,651 |
|||
| Trade accounts and bills receivable, net |
183,767 |
290,211 |
|||
| Inventories |
270,812 |
324,512 |
|||
| Prepayments to suppliers, net |
81,278 |
27,085 |
|||
| Assets classified as held for sale |
646,965 |
- |
|||
| Other current assets |
241,402 |
346,972 |
|||
| Total current assets |
1,689,692 |
1,441,290 |
|||
| Property, plant and equipment, net |
3,089,802 |
3,658,189 |
|||
| Deposits for purchases of property, plant and equipment and land use rights |
159,277 |
159,898 |
|||
| Land use rights |
243,084 |
282,978 |
|||
| Prepayments to suppliers expected to be utilized beyond one year, net |
7,978 |
8,701 |
|||
| Pledged bank deposits – non-current |
17,845 |
30,820 |
|||
| Investments in associates |
11,078 |
11,035 |
|||
| Other non-current assets |
55,825 |
170,438 |
|||
| Total assets |
5,274,581 |
5,763,349 |
|||
| Liabilities and equity |
|||||
| Current liabilities |
|||||
| Short-term borrowings and current installments of long-term borrowings and short-term PRC notes |
2,091,660 |
2,206,374 |
|||
| Trade accounts and bills payable |
702,857 |
1,043,623 |
|||
| Advance payments from customers, current installments |
246,115 |
129,838 |
|||
| Accrued expenses and other payables |
716,978 |
782,124 |
|||
| Liabilities directly associated with assets classified as held for sale |
632,546 |
0 |
|||
| Convertible senior notes, less debt discount |
23,779 |
23,766 |
|||
| Other financial liabilities |
77,489 |
64,220 |
|||
| Total current liabilities |
4,491,424 |
4,249,945 |
|||
| Long-term borrowings, excluding current installments and long-term PRC notes |
409,215 |
645,367 |
|||
| RMB-denominated US$-settled senior notes, less debt discount |
259,513 |
257,228 |
|||
| Advance payments from customers – non-current |
43,700 |
50,219 |
|||
| Other liabilities |
214,227 |
215,655 |
|||
| Total liabilities |
5,418,079 |
5,418,414 |
|||
| Redeemable non-controlling interests |
323,294 |
299,025 |
|||
| Equity |
|||||
| Total LDK Solar Co., Ltd. shareholders' equity |
(452,729) |
29,697 |
|||
| Non-controlling interests |
(14,063) |
16,213 |
|||
| Total equity |
(466,792) |
45,910 |
|||
| Total liabilities and equity |
5,274,581 |
5,763,349 |
|||
| LDK Solar Co., Ltd. Unaudited Condensed Consolidated Statements of Operations Information (In US$'000, except per ADS data) |
||||
| For the 3 Months Ended |
||||
| 12/31/2012 |
09/30/2012 |
|||
| Net sales |
135,898 |
291,520 |
||
| Cost of goods sold |
(218,136) |
(324,048) |
||
| Gross loss |
(82,238) |
(32,528) |
||
| Selling expenses |
(14,424) |
(10,373) |
||
| General and administrative expenses |
(130,057) |
(29,518) |
||
| Research and development expenses |
(2,926) |
(3,300) |
||
| Impairment loss for goodwill and intangible assets |
(26,743) |
- |
||
| Impairment loss for assets held for sales |
(74,178) |
- |
||
| Impairment loss for property, plant and equipment |
(78,170) |
- |
||
| Total operating expenses |
(326,498) |
(43,191) |
||
| Loss from operations |
(408,736) |
(75,719) |
||
| Other income (expenses): |
||||
| Interest income |
1,876 |
4,477 |
||
| Interest expense and amortization of debt issuance costs and debt discount |
(56,574) |
(61,045) |
||
| Foreign currency exchange (loss) gain, net |
(1,838) |
1,339 |
||
| Others, net |
24,074 |
9,619 |
||
| Loss before income tax |
(441,198) |
(121,329) |
||
| Income tax (expense) benefit |
(73,547) |
25,396 |
||
| Net loss |
(514,745) |
(95,933) |
||
| Loss attributable to non-controlling interests |
29,515 |
3,925 |
||
| Loss attributable to redeemable non-controlling interests |
22,162 |
6,222 |
||
| Net loss attributable to LDK Solar Co., Ltd. shareholders |
(463,068) |
(85,786) |
||
| Accretion to redemption value of redeemable non-controlling interests |
(53,954) |
(51,157) |
||
| Net loss available to LDK Solar Co., Ltd. shareholders |
(517,022) |
(136,943) |
||
| Net loss per ADS, Diluted |
$ (3.68) |
$ (1.08) |
||
|
Unaudited Condensed Consolidated Statement of Comprehensive Income Information
|
||||
|
Net loss |
(514,745) |
(95,933) |
||
| Other comprehensive loss |
||||
| Foreign currency exchange translation adjustment, net of nil tax |
12,404 |
(7,033) |
||
| Fair value changes in available-for-sale equity security, net of tax effect |
(351) |
(930) |
||
| Comprehensive loss |
(502,692) |
(103,896) |
||
| Less: comprehensive loss attributable to noncontrolling interests |
(29,620) |
(3,663) |
||
| Less: comprehensive loss attributable to redeemable noncontrolling interests |
(20,936) |
(6,576) |
||
| Comprehensive loss attributable to LDK Solar Co., Ltd. shareholders |
(452,136) |
(93,657) |
||
About LDK Solar (NYSE: LDK)
LDK Solar Co., Ltd. (NYSE: LDK) is a leading vertically integrated manufacturer of photovoltaic (PV) products. LDK Solar manufactures polysilicon, mono and multicrystalline ingots, wafers, cells, modules, systems, power projects and solutions. LDK Solar's headquarters and principal manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province in the People's Republic of China. LDK Solar's office in the United States is located in Sunnyvale, California. For more information about LDK Solar and its products, please visit www.ldksolar.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this press release are forward-looking statements, including but not limited to, LDK Solar's ability to raise additional capital to finance its operating activities, the effectiveness, profitability and marketability of its products, the future trading of its securities, the ability of LDK Solar to operate as a public company, the period of time during which its current liquidity will enable LDK Solar to fund its operations, its ability to protect its proprietary information, the general economic and business environment and conditions, the volatility of LDK Solar's operating results and financial condition, its ability to attract and retain qualified senior management personnel and research and development staff, its ability to timely and efficiently complete its ongoing projects, and other risks and uncertainties disclosed in LDK Solar's filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on information available to LDK Solar's management as of the date hereof and on its current expectations, assumptions, estimates and projections about LDK Solar and the PV industry. Actual results may differ materially from the anticipated results because of such and other risks and uncertainties. LDK Solar undertakes no obligation to update forward-looking statements to reflect subsequent events or circumstances, or changes in its expectations, assumptions, estimates and projections except as may be required by law.
SOURCE LDK Solar Co., Ltd.
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