China Sunergy Announces Third Quarter 2015 Financial Results
NANJING, China, Jan. 29, 2016 /PRNewswire/ -- China Sunergy Co., Ltd. (NASDAQ: CSUN) ("China Sunergy" or "the Company"), a specialized solar cell and module manufacturer, today announced its financial results for the third quarter ended September 30, 2015.
Third Quarter 2015 Financial Highlights
- Total revenue was US$111.1 million, an increase of 27.0% from US$87.5 million in the second quarter of 2015. The revenue for self-branded products totaled US$107.3 million and the revenue for the products processed under the OEM arrangement was US$2.6 million.
- Shipments totaled 308.9MW, an increase of 67.4% (124.4MW) from 184.5MW in the second quarter of 2015. Module shipments, including module processed under OEM arrangement of 54.3MW, were 208.4MW. Cell shipments, including cell processed under OEM arrangements of 6.1 MW, were 100.5MW.
- Average selling price ("ASP") for the Company's modules, excluding those processed under OEM arrangements, was US$0.52 per watt, compared with US$0.58 per watt in the second quarter of 2015.
- Gross profit was US$3.3 million and gross margin was 2.9%, compared with gross profit of US$6.1 million on gross margin of 6.9% in the second quarter of 2015.
- Net loss attributable to ordinary shareholders was US$22.0 million, compared with US$10.5 million in the second quarter of 2015.
- Net loss attributable to ordinary shareholders per ADS was US$1.48, compared with US$0.71 in the second quarter of 2015.
- Cash, cash equivalents and restricted cash totaled US$120.4 million as of September 30, 2015.
Third Quarter 2015 Financial Review
Total Revenue and Shipments
For the third quarter of 2015, total revenue was US$111.1 million, compared with US$87.5 million in the second quarter of 2015. The increase in revenue was mainly due to higher shipments in self-branded solar cells and modules. Revenue from the Company's self-brand modules and cells business totaled US$107.3 million or 96.5% of the total revenue, while revenue generated from the modules and cells processed under OEM arrangement, was US$2.6 million, or 2.4% of total revenue.
Total shipments for the third quarter of 2015 were 308.9MW, an increase of 67.4% from 184.5MW in the previous quarter. The increase in total shipments was primarily resulted from the strong demand in Chinese market. The total shipments to China increased to 195.5MW in the quarter ended September 30, 2015, compared with 48.2MW in the previous quarter. Total module shipments, including modules processed under OEM arrangement of 54.3MW, were 208.4MW for the third quarter of 2015. Total cell shipments, including cell processed under OEM arrangements of 6.1 MW, were 100.5MW for the third quarter of 2015.
Sales revenue derived from Asian market accounted for 72.9% of total revenue in the third quarter of 2015, of which 52.0% of total revenue was generated from China and 9.8% of total revenue was derived from India. In addition, sales to European and American markets represented 17.0% and 8.5% of total revenue in the quarter ended September 30, 2015. Sales revenue contributed by Asia, Europe and America as percentage of total revenue was 39.3%, 25.2% and 34.4%, respectively in the quarter ended June 30, 2015.
ASP
ASP for the Company's self-branded modules for the third quarter of 2015 was US$0.52 per watt, compared with US$0.58 per watt in the previous quarter. The decrease of ASP for the third quarter of 2015 was primarily due to higher shipments to lower price regions. ASP for the Company's self-branded cells during the third quarter of 2015 was US$0.28 per watt, compared with $0.26 per watt in the previous quarter.
Wafer and Conversion Costs
Blended wafer costs in the third quarter of 2015 were US$0.20 per watt and remained flat as compared to previous quarter. Conversion costs of cells and modules manufactured in the third quarter of 2015 were US$0.12 and US$0.18 per watt, respectively, compared with US$0.14 and US$0.18 per watt, respectively, in the previous quarter. The two-cent decrease in the conversion costs of cells was primarily due to the higher output.
Gross Profit and Gross Margin
Gross profit for the third quarter of 2015 was US$3.3 million on gross margin of 2.9%, compared with gross profit of US$6.1 million on gross margin of 6.9% for the second quarter of 2015. The decrease in gross profit and gross margin was primarily due to a faster rate of decline in average selling price for self-branded solar modules as compared to the decrease in the products' unit cost. In addition, a change in geographical mix resulted from higher shipments to lower-margin markets, combined with gross loss for the sales of self-branded solar cells contributed to the margin decrease in the quarter ended September 30, 2015. During the quarter, the unit purchasing price for wafer increased by approximately 5.6% compared with previous quarter, which heightened the unit cost of solar cells.
Operating Expenses, Operating Income (Loss) and Net Loss
Operating expenses increased to US$16.3 million in the third quarter of 2015, from US$13.9 million in the second quarter of 2015. The sequential increase in operating expenses was primarily due to the increase in general and administration expenses. During the third quarter of 2015, general and administration expenses were US$11.4 million during the third quarter of 2015, increased by US$2.7 million as compared to US$8.7 million in the second quarter of 2015. The increase was partly attributable to the increase in bad debt provision of approximately US$1.6 million.
Loss from operations was US$13.0 million in the third quarter of 2015, compared with loss from operations of US$7.8 million in the second quarter of 2015. In addition, the Company had other expenses of US$1.3 million versus other income of US$1.7 million in the previous quarter, which was primarily due to the foreign exchange loss incurred from the depreciation of RMB against U.S dollar.
Correspondingly, net loss attributable to ordinary shareholders was US$21.7 million in the third quarter of 2015, compared with US$10.5 million in the previous quarter.
Amount Due from/to Related Parties
Amount due from related parties totaled US$88.9 million as of September 30, 2015, a decrease of US$1.6 million compared to US$90.5 million as of June 30, 2015. Amount due to related parties totaled US$4.7 million as of September 30, 2015, an increase of US$1.1 million compared to US$3.6 million as of June 30, 2015.
Inventory
Inventories at the end of the third quarter of 2015 totaled US$72.2 million, a decrease of US$13.7 million from US$85.9 million at the end of the second quarter of 2015, which was mainly due to higher shipments during the quarter.
Advance to suppliers
Advance to suppliers totaled US$20.6 million at the end of the third quarter of 2015, an increase of US$11.9 million from US$8.7 million at the end of the second quarter of 2015. The increase was mainly driven by the higher shipments and strong demand for solar modules.
Accrued expenses and other current liabilities
As of September 30, 2015, accrued expenses and other current liabilities increased to US$41.2 million from US$26.2 million as of June 30, 2015. The increase in accrued expenses was primarily resulted from the increase in the accrual of interest expenses of approximately US$2.2 million. The increase in other current liabilities was mainly due to the increased advance from clients of US$12.8 million.
Cash Position
As of September 30, 2015, the Company had cash and cash equivalents of US$30.9 million, and restricted cash of US$89.5 million.
About China Sunergy Co., Ltd.
China Sunergy Co., Ltd. (NASDAQ:CSUN) designs, manufactures and delivers high efficiency solar cells and modules to the world from its production centers based in China and Turkey. China Sunergy also invests in high potential solar projects. Founded in 2004, China Sunergy is well known for its advanced solar cell technology, reliable product quality, and excellent customer service.
For more information, please visit http://www.csun-solar.com.
Contact Information:
China Sunergy Co., Ltd.
Zhuo Wang
Phone: + 86 25 5276 6696
Email: [email protected]
Safe Harbor Statement
This announcement may contain 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 facts in this announcement are forward-looking statements. These forward-looking statements are based on current expectations, assumptions, estimates and projections about the Company and the industry, and involve known and unknown risks and uncertainties, including but not limited to, the Company's failure to maintain its listing qualification due to, among other things, volatility in the Company's ADS price; the Company's ability to raise additional capital or renew existing bank borrowings as they become due to finance the Company's activities; the Company's customers' financial condition and creditworthiness, and their ability to settle accounts receivables; the effectiveness, profitability, and the marketability of its products; litigations and other legal proceedings, including any decisions by the US International Trade Committee and Department of Commerce on the petitions filed; the economic slowdown in China and elsewhere and its impact on the Company's operations; demand for and selling prices of the Company's products, execution of our strategy to expand into downstream solar power businesses, the future trading of the common stock of the Company; the ability of the Company to operate as a public company; the Company's ability in maintaining its liquidity; the period of time for which its current liquidity will enable the Company to fund its operations; the Company's ability to protect its proprietary information; general economic and business conditions; the volatility of the Company's operating results and financial condition; the Company's ability to attract or retain qualified senior management personnel and research and development staff; future shortage or availability of the supply of raw materials; impact on cost-competitiveness as a result of entering into long-term arrangements with raw material suppliers and other risks detailed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, 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.
The following financial information is extracted from the Company's condensed consolidated financial statements for the respective periods.
| China Sunergy Co., Ltd. |
|||
| Unaudited Condensed Consolidated Income Statement Information |
|||
| (In US$'000, except ADS and per ADS data) |
|||
| For the 3 months ended |
|||
| Sep 30, 2015 |
Jun 30, 2015 |
Sep 30, 2014 |
|
| Total sales |
111,129 |
87,504 |
63,252 |
| Cost of goods sold |
(107,871) |
(81,439) |
(65,649) |
| Gross profit |
3,258 |
6,065 |
(2,397) |
| Operating expenses: |
|||
| Selling expenses |
(4,077) |
(4,224) |
(2,725) |
| General and administrative expenses |
(11,425) |
(8,745) |
(5,657) |
| Research and development expenses |
(800) |
(897) |
(855) |
| Total operating expenses |
(16,302) |
(13,867) |
(9,237) |
| Income(loss) from operations |
(13,044) |
(7,801) |
(11,634) |
| Interest expense |
(7,358) |
(5,660) |
(7,082) |
| Interest income |
541 |
1,414 |
1,668 |
| Other income/(expenses), net |
(1,265) |
1,666 |
(9,478) |
| Income(loss) before income tax |
(21,126) |
(10,381) |
(26,526) |
| Income tax benefit(expense) |
(568) |
(112) |
190 |
| Net income(loss) |
(21,694) |
(10,493) |
(26,336) |
| Less: non-controlling interest |
288 |
21 |
(696) |
| Net income (loss) attributable to ordinary shareholders |
(21,982) |
(10,514) |
(25,640) |
| Net income (loss) attributable to ordinary shareholders per ADS |
|||
| Basic |
($1.48) |
($0.71) |
($1.73) |
| Diluted |
($1.48) |
($0.71) |
($1.73) |
| Weighted average ADS outstanding |
|||
| Basic |
14,849,292 |
14,849,292 |
14,849,292 |
| Diluted |
14,849,292 |
14,849,292 |
14,849,292 |
| China Sunergy Co., Ltd |
|||
| Unaudited Condensed Consolidated Balance Sheet Information |
|||
| (In US$'000) |
|||
| Sep 30, 2015 |
Jun 30, 2015 |
Sep 30, 2014 |
|
| Assets |
|||
| Current Assets |
|||
| Cash and cash equivalents |
30,889 |
38,476 |
21,462 |
| Restricted cash |
89,478 |
109,984 |
182,347 |
| Accounts receivable, net |
71,530 |
64,634 |
58,089 |
| Other receivable, net |
13,266 |
30,255 |
24,793 |
| Project assets |
52 |
54 |
8,628 |
| Inventories, net |
72,221 |
85,945 |
69,593 |
| Advance to suppliers, net |
20,565 |
8,701 |
6,922 |
| Amount due from related parties |
88,860 |
90,518 |
74,025 |
| Current deferred tax assets |
1,914 |
1,613 |
2,411 |
| - |
- |
- |
|
| Total current assets |
388,775 |
430,180 |
448,270 |
| Property, plant and equipment, net |
207,714 |
214,886 |
228,105 |
| Prepaid land use rights |
22,947 |
23,087 |
23,516 |
| Deferred tax assets |
9,713 |
10,135 |
6,781 |
| Long-term investment |
1 |
1 |
1 |
| Intangible assets |
6 |
6 |
- |
| Other long-term assets |
4,699 |
4,930 |
5,123 |
| Total assets |
633,855 |
683,225 |
711,796 |
| Liabilities and equity |
|||
| Current liabilities |
|||
| Short-term bank borrowings |
283,809 |
310,634 |
356,826 |
| Accounts payable |
135,133 |
147,894 |
94,586 |
| Notes payable |
1,063 |
4,364 |
9,483 |
| Accrued expenses and other current liabilities |
41,203 |
26,249 |
22,859 |
| Income tax payable |
4,660 |
4,818 |
3,929 |
| Amount due to related parties |
4,733 |
3,563 |
9,116 |
| Total current liabilities |
470,601 |
497,522 |
496,799 |
| Long-term debt |
267,339 |
271,238 |
268,529 |
| Long-term payables |
- |
- |
365 |
| Accrued warranty costs |
23,104 |
23,356 |
21,285 |
| Other liabilities |
14,899 |
15,614 |
14,757 |
| Total liabilities |
775,943 |
807,730 |
801,735 |
| Equity: |
|||
| Ordinary shares: par value $0.0001; 463,247,600 shares |
24 |
24 |
24 |
| Additional paid-in capital |
185,367 |
185,367 |
185,367 |
| Treasury shares (at par value) |
3 |
3 |
3 |
| Accumulated profit(deficit) |
(366,022) |
(344,011) |
(311,295) |
| Accumulated other comprehensive income |
38,795 |
34,654 |
36,511 |
| Total equity attributable to China Sunergy Co. Ltd. |
(141,833) |
(123,963) |
(89,390) |
| Non-controlling interests |
(255) |
(542) |
(549) |
| Total equity |
(142,088) |
(124,505) |
(89,939) |
| Total liabilities and equity |
633,855 |
683,225 |
711,796 |
SOURCE China Sunergy Co., Ltd.
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