Suntech Reports Fourth Quarter and Full Year 2009 Financial Results
Full Year 2009 PV Shipments Increased 42% Year-Over-Year to 704MW
Full-Year 2009 Net Revenues of $1.7 Billion and Net Income per Diluted ADS of $0.53
SAN FRANCISCO and WUXI, China, March 4 /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 fourth fiscal quarter and full year ended December 31, 2009.
Fourth Quarter 2009 Financial Highlights
-- Total net revenues increased 23.4% sequentially to $583.6 million in
the fourth quarter of 2009
-- Gross profit margin for the core wafer to module business was 26.3% in
the fourth quarter of 2009, compared with 20.0% in the third quarter of
2009
-- Consolidated gross profit margin was 23.8% in the fourth quarter of
2009, compared with 17.8% in the third quarter 2009
-- Net income attributable to holders of ordinary shares was $49.9 million,
or $0.27 per diluted American Depository Share (ADS). Each ADS
represents one ordinary share
Full Year 2009 Financial Highlights
-- Total net revenues were $1,693.3 million for the full year 2009
-- Full year 2009 total shipments of solar products increased 42%
year-over-year to 704MW
-- Consolidated gross profit margin was 20.0%
-- Net income attributable to holders of ordinary shares for the full year
was $91.5 million or $0.53 per ADS
-- Cash, cash equivalents and short-term principal guaranteed investment
was $1,034.0 million as of December 31, 2009
-- Suntech increased capacity to 1.1GW by the end of 2009 and maintains
target to increase total PV cell and module production capacity to
1.4GW by the middle of 2010, of which 450MW will be Pluto-enabled
"We are pleased to announce outstanding fourth quarter results and significant shipment growth for the full year 2009," said Dr. Zhengrong Shi, Suntech's Chairman and CEO. "We outperformed our guidance with the highest quarterly shipments volume in Suntech history and continued to extend our market share. In addition, continued progress on our cost reduction initiatives enabled us to considerably improve profitability during the quarter.
"Over the past 12 months, our investment in expanding our deeply experienced European management team helped to enhance our position as a global company with truly localized service capabilities. This robust infrastructure enabled Suntech to ship over 1.5MW per day to European markets in 2009. Outside of Europe, we doubled annual shipments to the U.S., expanded our Japanese sales channels, brought utility solar to China and built our presence in other key emerging markets.
"We also continued to break new ground in technology and quality. We introduced our Pluto-powered HiPerforma solar panel and the Reliathon platform for utility scale projects, and were recently the first solar company in Asia to be awarded both the VDE Test Data Acceptance Program certificate and the China National Accreditation Service's Laboratory Accreditation Certificate. We view these investments as critical to the long-term development of the Company and are committed to maintaining leadership on both fronts.
"In the face of a challenging environment worldwide in 2009, Suntech enhanced our customer support platforms, entered new markets, developed world-class PV innovations, and improved our balance sheet. In 2010, these priorities will remain at the forefront as we establish our new U.S. factory, expand production capacity to 1.4GW, and continue to roll out our high efficiency Pluto technology.
"We are confident that clear customer recognition of the reliability and performance of Suntech products combined with improving affordability will continue to drive strong demand. With our industry leading scale, quality and technology we are well positioned to diversify our sales geographies and expand our market share. We currently target shipments of at least 1.25GW in 2010."
RECENT BUSINESS HIGHLIGHTS
Sales Agreements and Projects
-- Suntech signed three long-term supply commitment agreements with
strategic partners in Europe for up to 490MW of high performance solar
modules to be delivered over the next three years.
-- Suntech completed two solar systems that will power the China Pavilion
and the Theme Pavilion of the 2010 Shanghai World Expo featuring two
building-integrated solar systems with a combined power output of
3.12MW.
-- In 2009, Suntech completed China's first 10MW project in Shizuishan,
Ningxia Province and commenced construction on an additional 20MW of
utility scale solar projects. Suntech's in-house system integration
team will provide turn key solar solutions for these projects. Suntech
currently has over 2GW of framework agreements to build solar projects
in China over the next 10 years.
-- Suntech signed a memorandum of understanding ("MOU") with Ontario,
Canada's Pure energies to supply up to 17MW in 2010. The MOU is focused
on bringing affordable, high-quality solar systems to Ontario's rapidly
growing residential solar market, and micro-feed in tariff program.
New Manufacturing and Services
-- Suntech will be the first China-based cleantech company to bring
manufacturing jobs to the United States with its new factory being
built in Goodyear, Arizona. The 30MW facility will showcase the
company's latest-generation solar manufacturing technologies and
equipment. Manufacturing at the Goodyear plant will begin in September
2010.
Technology
-- Pluto technology is performing well in commercial scale production and
achieving average conversion efficiency of 19% on mono-crystalline PV
cells and 17% on multi-crystalline PV cells. Suntech is on track to
ship 30MW of Pluto shipments in the first half of 2010 and 150MW in the
second half of 2010.
-- Suntech became the first solar company in Asia to be awarded both the
VDE Test Data Acceptance Program and the China National Accreditation
Service's Laboratory Accreditation Certificate. The certificates are
further recognition of Suntech's strong commitment to implementing
world-class quality processes to ensure solar panel performance.
Convertible Notes
-- In the first quarter of 2010 Suntech repurchased an aggregate of $221.2
million principal amount of its 0.25% Convertible Senior Notes due 2012
for a total consideration of $221.2 million. As of March 4, 2010, $3.8
million principal amount of the 2012 convertible notes remain
outstanding. The total non-cash interest expense for the repurchased
Convertible Senior Notes in 2009 was $14.2 million.
Fourth Quarter 2009 Results
Total net revenues for the fourth quarter of 2009 were $583.6 million, an increase of 23.4% from $473.1 million in the third quarter of 2009.
Gross margin for the core wafer to module business was 26.3% in the fourth quarter of 2009, compared with 20.0% in the third quarter of 2009.
For the fourth quarter of 2009, consolidated gross profit was $138.7 million and gross margin was 23.8% compared to consolidated gross profit of $84.1 million and gross margin of 17.8% in the third quarter of 2009. The increase in gross margins was primarily due to a decrease in both the cost of silicon wafers and processing cost for the period.
Operating expenses for the fourth quarter of 2009 were $51.7 million compared to $39.3 million in the third quarter of 2009. The increase in operating expenses was primarily due to an increase in selling expenses in line with revenue growth and an increase in R&D expenses due to continued investments in Pluto, process automation, and new technology development. Of the R&D expenses approximately $4 million were non-recurring in nature.
Income from operations increased 95% to $87.0 million for the fourth quarter of 2009 compared to $44.8 million in the third quarter of 2009.
Net interest expense was $24.2 million in the fourth quarter of 2009 compared to net interest expense of $23.5 million in the third quarter of 2009. Net interest expense in the fourth quarter of 2009 included $12.7 million in non-cash expenses of which $11.6 million was related to the adoption of FASB ASC Codification 470-20-65.
Foreign currency exchange loss was $13.2 million in the fourth quarter of 2009 compared to a foreign currency exchange gain of $10.5 million in the third quarter of 2009. The foreign currency loss in the fourth quarter was primarily related to the depreciation of the Euro versus the USD.
Net other expense was $3.6 million in the fourth quarter of 2009, compared with $3.8 million of net other expense in the third quarter of 2009. The net other expense in the fourth quarter was primarily due to losses from mark-to-market valuation of foreign exchange forward contracts.
Net income attributable to holders of ordinary shares was $49.9 million, or $0.27 per diluted ADS for the fourth quarter of 2009, compared to net income of $29.8 million, or $0.16 per diluted ADS, for the third quarter of 2009.
In the fourth quarter of 2009, the major non-cash related expenses were share-based compensation charges of $1.6 million; $12.7 million of non-cash interest expenses, as mentioned above; and depreciation and amortization expenses of $20.9 million.
In the fourth quarter of 2009, capital expenditures totaled $35.4 million.
Cash, cash equivalents and short-term principal guaranteed investment increased to $1,034.0 million as of December 31, 2009 from $855.7 million as of September 30, 2009. The increase was primarily due to positive cash flows from our core business and stringent working capital management.
Accounts receivable was $384.4 million as of December 31, 2009, compared with $420.4 million as of September 30, 2009. Days sales outstanding were 60 days in the fourth quarter of 2009, compared to 81 days in the third quarter of 2009.
Accounts receivable due from investee companies of GSF was $110.2 million as of December 31, 2009, compared with $112.1 million as of September 30, 2009. The decrease was due to the depreciation of the Euro versus the USD during the fourth quarter.
Accounts payable was $264.2 million as of December 31, 2009, compared with $196.8 million as of September 30, 2009. The increase in accounts payable was primarily due to extended credit terms with suppliers.
Full Year 2009 Results
Total net revenues for the full year 2009 were $1,693.3 million, compared with $1,923.5 million in 2008. The year-over-year decline was primarily due to the decrease in the average selling price of PV products.
For the full year 2009, consolidated gross profit was $338.8 million and gross margin was 20.0% compared to consolidated gross profit of $342.9 million and gross margin of 17.8% for the full year 2008. The increase in gross margins was primarily a result of the successful implementation of initiatives to reduce silicon wafer costs and non-silicon wafer production costs, which decreased faster than the average selling price for PV products.
Operating expenses for the full year 2009 were $164.8 million compared to $160.4 million for the full year 2008.
Income from operations was $174.0 million for the full year 2009 compared to $182.5 million for the full year 2008.
Net income attributable to holders of ordinary shares increased 181.8% to $91.5 million, or $0.53 per diluted ADS for the full year 2009, compared to net income of $32.5 million, or $0.20 per diluted ADS, for the full year 2008.
In the full year 2009, capital expenditures, which were primarily related to the construction of production facilities in Shanghai and other infrastructure projects to support expansion of Pluto capacity, totaled $142.6 million. Depreciation and amortization expenses totaled $66.3 million.
Business Outlook
Suntech expects first quarter 2010 shipments to increase by 5 to 10% compared to the fourth quarter of 2009. Consolidated gross margin in the first quarter of 2010 is expected to be in the range of 18% to 20%.
Suntech targets to ship more than 1.25GW of PV products in the full-year 2010.
The Company continues to target expansion to 1.4GW of PV cell and module production capacity by the middle of 2010, of which 450MW will be Pluto-enabled. Capital expenditures are expected to be approximately $200 million in 2010.
2009 Results Preliminary and Unaudited
The results presented in this press release are preliminary and unaudited. The Company is in the process of completing its 2009 audit, and adjustments to the results set forth in this press release may be identified as a result of this process. The Company's 2009 audited financial statements will be included in its 2009 Annual Report on Form 20-F to be filed with the U.S. Securities and Exchange Commission.
Fourth Quarter and Full Year 2009 Conference Call Information
Suntech management will host a conference call today at 8:00a.m. Eastern Standard Time (which corresponds to 9:00p.m. Beijing/Hong Kong time and 1:00p.m. Greenwich Mean Time on March 4, 2010) to discuss the company's results.
To access the conference call, please dial +1-617-614-3473 (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 March 17, 2010 by dialing +1-617-801-6888 (passcode: 52522324).
About Suntech
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 offers an extensive range of customer-centric innovations, including Suntech's patent-pending Pluto technology for crystalline silicon solar cells, which improves power output by up to 12% compared to conventional production methods, the Reliathon(TM), the industry's first fully integrated utility-scale solar platform, and its broad range of building-integrated solar products.
Suntech designs and delivers commercial and utility scale solar power systems in China and the United States. 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 http://www.suntech-power.com .
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 annual shipment guidance for 2010, the ability to increase PV cell production capacity to 1.4GW by mid-2010, Pluto capacity in 2010, Q1 and full year 2010 sales, the ability to expand our global service platform and deliver world-class innovation, 2010 capital expenditures, the amount of projects built in China under the 2 GW of framework agreements for solar projects, the amount of panels supplied to Pure energies in 2010 and 2011, the timing and ability to collect accounts receivable due from investees of GSF and potential liabilities which may become owing under any other contingent obligations to GSF and investee companies, and the commencement date of the manufacturing at the Goodyear plant. 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 and full year consolidated income statements are
unaudited. The condensed consolidated balance sheets are derived
from Suntech's unaudited consolidated financial statements.
SUNTECH POWER HOLDINGS CO., LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
(In $'000)
As of As of
September 30, December 31,
2009 2009
ASSETS
Current assets:
Cash and cash equivalents 655,743 833,158
Restricted cash 158,414 124,877
Inventories 284,548 280,054
Accounts receivable 420,385 384,416
-----from GSF Investee Companies 112,114 110,231
-----from others 308,271 274,185
Value-added tax recoverable 52,532 41,219
Advances to suppliers 43,431 48,820
Short-term investments 200,000 200,817
Other current assets 280,869 242,625
Total current assets 2,095,922 2,155,986
Property, plant and equipment, net 766,512 777,580
Intangible assets, net 172,376 166,687
Goodwill 87,994 86,062
Investments in affiliates 240,366 257,256
Long-term prepayments 174,494 188,085
Long-term loan to suppliers 54,999 54,667
Amount due from related parties 187,906 193,577
Other non-current assets 118,759 109,664
TOTAL ASSETS 3,899,328 3,989,564
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings, including
current portion of long-term bank
borrowings 847,596 800,390
Accounts payable 196,782 264,235
Other current liabilities 436,005 453,455
Total current liabilities 1,480,383 1,518,080
Long-term bank borrowings 136,281 138,021
Convertible notes 509,759 516,912
Accrued warranty costs 50,140 55,152
Other long-term liabilities 156,557 142,730
Total liabilities 2,333,120 2,370,895
Total shareholders' equity 1,556,833 1,603,959
Non-controlling interest 9,375 14,710
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 3,899,328 3,989,564
SUNTECH POWER HOLDINGS CO., LTD.
CONSOLIDATED INCOME STATEMENT
(In $'000, except share, per share, and per ADS data)
2008 2009
As
adjusted
Net revenues 1,923,509 1,693,348
Total cost of revenues 1,580,622 1,354,584
Gross profit 342,887 338,764
Operating expenses
Selling expenses 59,328 58,872
General and administrative expenses
85,737 76,888
Research and development expenses 15,314 29,022
Total operation expenses 160,379 164,782
Income from operations 182,508 173,982
Interest expenses (106,024) (103,257)
Interest income 32,572 9,553
Foreign exchange (loss)/gain (14,404) 8,640
Other (expense)/income (62,303) 2,575
Income before income taxes 32,349 91,493
Tax provision (1,618) (2,519)
Net income after taxes before
noncontrolling interest and
equity in earnings of affiliates 30,731 88,974
Net gain/(loss) attributable to the
noncontrolling interest 1,442 (61)
Added equity in gain of affiliates 287 2,571
Net income attributable to holders
of ordinary shares 32,460 91,484
Net income per share and per ADS:
- Basic 0.21 0.54
- Diluted 0.20 0.53
Shares used in computation:
- Basic 154,700,584 169,671,649
- Diluted 160,334,198 172,491,074
SUNTECH POWER HOLDINGS CO., LTD.
CONSOLIDATED INCOME STATEMENT
(In $'000, except share, per share, and per ADS data)
Three months Three months Three months
ended ended ended
December 31, September 30, December 31,
2008 2009 2009
As adjusted
Total net revenues 414,413 473,113 583,619
Total cost of revenues 412,068 389,036 444,916
Gross profit 2,345 84,077 138,703
Selling expenses 14,531 15,477 20,493
General and administrative expenses 27,112 17,096 18,164
Research and development expenses 4,529 6,753 13,023
Total operating expenses 46,172 39,326 51,680
Income/(loss) from operations (43,827) 44,751 87,023
Interest expenses (31,137) (24,963) (25,667)
Interest income 10,073 1,430 1,449
Foreign exchange (loss)/gain (3,187) 10,498 (13,198)
Other expense (52,002) (3,800) (3,646)
(Loss)/Income before income taxes (120,080) 27,916 45,961
Tax benefit/(provision) 11,073 (122) (2,643)
Net income after taxes before
noncontrolling interest and equity
in earnings of affiliates (109,007) 27,794 43,318
Net (loss)/gain attributable to the
noncontrolling interest (401) (379) 253
Equity in earnings of affiliates 287 2,377 6,361
Net (loss)/income (109,121) 29,792 49,932
Net income per share and per ADS:
- Basic (0.70) 0.17 0.28
- Diluted (0.69) 0.16 0.27
Shares and ADSs used in
computation:
- Basic 155,880,532 178,916,675 179,047,395
- Diluted 158,408,817 182,138,633 182,322,610
Each ADS represents one ordinary share
For further information, please contact:
In China:
Rory Macpherson
Investor Relations Director
Tel: +86-21-6288-5574
Email: [email protected]
In the United States:
Kristen McNally
Executive Vice President
The Piacente Group, Inc. (Investor Relations Counsel, Suntech)
Tel: +1-212-481-2050
Email: [email protected]
SOURCE Suntech Power Holdings Co., Ltd.
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