JA Solar Announces Third Quarter 2017 Results
BEIJING — JA Solar Holdings Co., Ltd. (Nasdaq:JASO) (“JA Solar” or the “Company”), one of the world’s largest manufacturers of high-performance solar power products, today announced its unaudited financial results for its third quarter ended September 30, 2017.
Third Quarter 2017 Highlights
- Total shipments were1,640.9 megawatts (“MW”), consisting of 1,582.5 MW of modules and 37.9 MW of cells to external customers, and 20.5 MW of modules to the Company’s downstream projects. External shipments were up 30.6% y/y and down 30.0% sequentially
- Shipments of modules were 1,582.5 MW, an increase of 31.9% y/y and a decrease of 26.3% sequentially
- Shipments of cellswere 37.9 MW, a decrease of 3% y/y and 77.3% sequentially
- Net revenue was RMB 4.3 billion ($652.6 million), an increase of3% y/y and a decrease of 27.1% sequentially
- Gross margin was 11.8%, a decrease of 200 basis points y/y and 110 basis points sequentially
- Operating profit wasRMB 169.8 million ($25.5 million), compared to RMB 121.4 million ($18.2 million) in the third quarter of 2016, and RMB 255.1 million ($38.3 million) in the second quarter of 2017
- Net income wasRMB 41.9 million ($6.3 million), compared to RMB 44.1 million ($6.6 million) in the third quarter of 2016, and RMB 134.6 million ($20.2 million) in the second quarter of 2017
- Earnings per diluted ADS were RMB 0.89 or $0.13, compared to RMB 0.86or $0.13 in the third quarter of 2016, and RMB 2.87 or $0.43 in the second quarter of 2017
- Cash and cash equivalents were RMB 2.1 billion ($309.1 million), a decrease of RMB 1.2 billion ($176.9 million) during the quarter
- Non-GAAP earnings1per diluted ADS were RMB 0.89 or $0.13, compared to RMB 0.86 or $0.13 in the third quarter of 2016, and RMB 2.87 or $0.43 in the second quarter of 2017
Mr. Baofang Jin, Chairman and CEO of JA Solar, commented, “Third quarter results were in-line with our expectations. Total module shipments during the quarter increased more than 30% year-over-year to approximately 1.6 GW, largely driven by demand from our key markets, including China, the U.S., Europe and Japan. Additionally, we maintained gross margin in the low teens through stringent cost control in an adverse pricing environment of polysilicon and wafers during the quarter.”
Mr. Jin continued, “We are seeing some uncertainties around the ongoing trade cases in the U.S. and India, which could impact global solar demand in the mid-term. Additionally, accelerated capacity expansion in the industry is reshaping the competition landscape. That being said, we remain confident that our balanced global footprint and flexible business model will enable us to adjust to evolving market conditions as in the past cycles. Our team remains focused on executing our business strategy to provide our customers with high-quality, high-reliability products, as we continue to position JA Solar for long-term growth.”
All shipment and financial figures refer to the quarter ended September 30, 2017, unless otherwise specified. All “year over year” or “y/y” comparisons are against the quarter ended September 30, 2016. All “sequential” comparisons are against the quarter ended June 30, 2017.
Total shipments were 1,640.9 MW, within the guidance range of 1,600 to 1,700 MW. External shipments of 1,620.4 MW increased 30.6% year-over-year and decreased 30.0% sequentially.
External shipments breakdown by product (MW)
| 2016Q3 | 2017Q2 | 2017Q3 | QoQ% | YoY% | |||
| Modules and module tolling | 1,200.0 | 2,147.5 | 1,582.5 | -26.3 | % | 31.9 | % |
| Cells and cell tolling | 40.9 | 167.2 | 37.9 | -77.3 | % | -7.3 | % |
| Total | 1,240.9 | 2,314.7 | 1,620.4 | -30.0 | % | 30.6 | % |
External shipments breakdown by region (percentage)
| 2016Q3 | 2017Q2 | 2017Q3 | QoQ(pp) | YoY(pp) | ||||
| China | 32.0 | % | 59.2 | % | 47.3 | % | -11.90 | 15.30 |
| APAC ex-China | 25.8 | % | 24.9 | % | 16.3 | % | -8.60 | -9.50 |
| Europe | 6.5 | % | 5.1 | % | 14.1 | % | 9.00 | 7.60 |
| North America | 13.0 | % | 8.1 | % | 17.2 | % | 9.10 | 4.20 |
| South America | 20.2 | % | 0.4 | % | 0.4 | % | 0.00 | -19.80 |
| Others | 2.5 | % | 2.3 | % | 4.7 | % | 2.40 | 2.20 |
Net revenue was RMB 4.3 billion ($652.6 million), an increase of 4.3% y/y and a decrease of 27.1% sequentially.
Gross profit of RMB 513.6 million ($77.2 million) decreased 10.6% y/y and 33.4% sequentially. Gross margin was 11.8%, which compares to 13.8% in the year-ago quarter, and 12.9% in the second quarter of 2017.
Total operating expenses of RMB 343.8 million ($51.7 million) were 7.9% of revenue. This compares to operating expenses of 10.9% of revenue in the year-ago quarter, and 8.7% of revenue in the second quarter of 2017.
Operating profit was RMB 169.8 million ($25.5 million), compared to RMB 121.4 million ($18.2 million) in the year-ago quarter, and RMB 255.1 million ($38.3 million) in the second quarter of 2017. Operating margin was 3.9%, compared with 2.9% in the prior-year period and 4.3% in the previous quarter.
Interest expense was RMB 80.3 million ($12.1 million), compared to RMB 75.4 million ($11.3 million) in the year-ago quarter, and RMB 82.6 million ($12.4 million) in the second quarter of 2017.
The change in fair value of warrant derivatives was nil, compared with positive RMB 17 thousand ($2.6 thousand) in the year-ago quarter, and nil in the second quarter of 2017. The warrants were issued on August 16, 2013 in conjunction with the Company’s $96 million registered direct offering, and expired on August 16, 2016.
Earnings per diluted ADS were RMB 0.89 or $0.13, compared to earnings per diluted ADS of RMB 0.86 or $0.13 in the year-ago quarter, and earnings per diluted ADS of RMB 2.87 or $0.43 in the second quarter of 2017.
Liquidity
As of September 30, 2017, the Company had cash and cash equivalents of RMB 2.1 billion ($309.1 million), and total working capital of RMB 291.2 million ($43.8 million). Total short-term borrowings were RMB 3.3 billion ($491.8 million). Total long-term borrowings were RMB 2.9 billion ($433.2 million), of which RMB 961.3 million ($144.5 million) were due in one year.
Business Outlook
For the fourth quarter of 2017, the Company expects total cell and module shipments to be in the range of 1,600 to 1,800 MW. Nearly all will be external shipments.
Investor Conference Call / Webcast Details
JA Solar’s management will host an earnings conference call on November 15, 2017 at 8:00 a.m. U.S. Eastern Time (9:00 p.m. China Time).
Dial-in details for the earnings conference call are as follows:
| Phone Number | Toll-Free Number | |
| United States | +1 8456750437 | +1 8665194004 |
| Hong Kong | +852 30186771 | +852 800906601 |
| Mainland China | +86 8008190121 +86 4006208038 |
|
| Other International | +65 67135090 | |
Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is 7597129.
A replay of the conference call may be accessed by phone at the following numbers until November 23, 2017. To access the replay, please reference the conference ID 7597129.
| Phone Number | Toll-Free Number | |
| United States | +1 6462543697 | +1 8554525696 |
| Hong Kong | +852 30512780 | +852 800963117 |
| Mainland China | +86 8008700206 +86 4006322162 |
|
| Other International | +61 281990299 | |
Currency Convenience Translation
The conversion of Renminbi into U.S. dollars in this release, made solely for the convenience of the reader, is based on the noon buying rate in the city of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York as of September 30, 2017, which was RMB 6.6533 to $1.00. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on September 30, 2017, or at any other date. The percentages stated in this press release are calculated based on Renminbi.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words such as “may,” “expect,” “anticipate,” “aim,” “intend,” “plan,” “believe,” “estimate,” “potential,” “continue,” and other similar statements. Statements other than statements of historical facts in this announcement are forward-looking statements, including but not limited to, our expectations regarding the expansion of our manufacturing capacities, our future business development, and our beliefs regarding our production output and production outlook. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. Further information regarding these and other risks is included in Form 20-F and other documents filed with the Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements, 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.
About JA Solar Holdings Co., Ltd.
JA Solar Holdings Co., Ltd. is a leading manufacturer of high-performance solar power products that convert sunlight into electricity for residential, commercial, and utility-scale power generation. The Company is one of the world’s largest producers of solar power products. Its standard and high-efficiency product offerings are among the most powerful and cost-effective in the industry. The Company distributes products under its own brand and also produces on behalf of its clients. The Company shipped 5.2 GW of solar power products in 2016. JA Solar is headquartered in Beijing, China, and maintains production facilities in Shanghai, Hebei, Jiangsu and Anhui provinces in China, as well as Penang, Malaysia and Bac Giang, Vietnam.
For more information, please visit www.jasolar.com.
Contact:
The Blueshirt Group
Ralph Fong
Phone: +1 (415) 489-2195
Email: ralph@blueshirtgroup.com
1 JA Solar adjusts net income attributable to the Company’s ordinary shareholders to exclude changes in fair value of certain warrants granted to certain investors in a registered direct offering (the “Offering”) closed on August 16, 2013.
| JA Solar Holdings Co., Ltd. | ||||||||
| Condensed Consolidated Statements of Operations and Comprehensive Income | ||||||||
| (Unaudited) | ||||||||
| For three months ended | ||||||||
| Sep. 30, 2016 | Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | |||||
| RMB’000 | RMB’000 | RMB’000 | USD’000 | |||||
| Net revenues | 4,162,927 | 5,953,211 | 4,341,718 | 652,566 | ||||
| Cost of sales | (3,588,469 | ) | (5,182,372 | ) | (3,828,137 | ) | (575,374 | ) |
| Gross profit | 574,458 | 770,839 | 513,581 | 77,192 | ||||
| Selling, general and administrative expenses | (406,194 | ) | (480,065 | ) | (302,786 | ) | (45,509 | ) |
| Research and development expenses | (46,871 | ) | (35,667 | ) | (40,964 | ) | (6,157 | ) |
| Total operating expenses | (453,065 | ) | (515,732 | ) | (343,750 | ) | (51,666 | ) |
| Income from operations | 121,393 | 255,107 | 169,831 | 25,526 | ||||
| Interest expense | (75,378 | ) | (82,617 | ) | (80,283 | ) | (12,067 | ) |
| Change in fair value of warrant derivatives | 17 | – | – | – | ||||
| Other income/(loss), net | 10,450 | 13,654 | (35,594 | ) | (5,350 | ) | ||
| Income before income taxes | 56,482 | 186,144 | 53,954 | 8,109 | ||||
| Income tax expense | (12,361 | ) | (51,536 | ) | (12,061 | ) | (1,813 | ) |
| Net income | 44,121 | 134,608 | 41,893 | 6,296 | ||||
| Less: loss attributable to noncontrolling interest | (715 | ) | – | – | – | |||
| Net income attributable to JA Solar Holdings | 44,836 | 134,608 | 41,893 | 6,296 | ||||
| Net income per share attributable to ordinary shareholders: | ||||||||
| Basic | 0.17 | 0.57 | 0.18 | 0.03 | ||||
| Diluted | 0.17 | 0.57 | 0.18 | 0.03 | ||||
| Weighted average number of shares outstanding: | ||||||||
| Basic | 234,290,842 | 234,311,611 | 234,360,842 | 234,360,842 | ||||
| Diluted | 234,338,817 | 234,333,946 | 234,383,172 | 234,383,172 | ||||
| Comprehensive income | ||||||||
| Net income | 44,121 | 134,608 | 41,893 | 6,296 | ||||
| Foreign currency translation adjustments, net of tax | (3,776 | ) | (786 | ) | 3,276 | 492 | ||
| Other comprehensive (loss)/income | (3,776 | ) | (786 | ) | 3,276 | 492 | ||
| Comprehensive income | 40,345 | 133,822 | 45,169 | 6,788 | ||||
| Loss attributable to noncontrolling interest | (715 | ) | – | – | – | |||
| Comprehensive income attributable to JA Solar Holdings | 41,060 | 133,822 | 45,169 | 6,788 | ||||
| NON-GAAP RECONCILIATION | ||||||||
| GAAP net income attributable to JA Solar Holdings | 44,836 | 134,608 | 41,893 | 6,296 | ||||
| Change in fair value of warrant derivatives | (17 | ) | – | – | – | |||
| Non-GAAP net income attributable to JA Solar Holdings | 44,819 | 134,608 | 41,893 | 6,296 | ||||
| Non-GAAP net income per share attributable to ordinary shareholders: | ||||||||
| Basic | 0.17 | 0.57 | 0.18 | 0.03 | ||||
| Diluted | 0.17 | 0.57 | 0.18 | 0.03 | ||||
| Non-GAAP weighted average number of shares outstanding: | ||||||||
| Basic | 234,290,842 | 234,311,611 | 234,360,842 | 234,360,842 | ||||
| Diluted | 234,338,817 | 234,333,946 | 234,383,172 | 234,383,172 | ||||
| JA Solar Holdings Co., Ltd. | ||||||
| Condensed Consolidated Statements of Operations | ||||||
| (Unaudited) | ||||||
| For nine months ended | ||||||
| Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2017 | ||||
| RMB’000 | RMB’000 | USD’000 | ||||
| Net revenues | 11,746,233 | 13,987,335 | 2,102,315 | |||
| Cost of sales | (9,968,121 | ) | (12,269,579 | ) | (1,844,134 | ) |
| Gross profit | 1,778,112 | 1,717,756 | 258,181 | |||
| Selling, general and administrative expenses | (1,114,964 | ) | (1,095,709 | ) | (164,687 | ) |
| Research and development expenses | (130,513 | ) | (117,091 | ) | (17,599 | ) |
| Total operating expenses | (1,245,477 | ) | (1,212,800 | ) | (182,286 | ) |
| Income from operations | 532,635 | 504,956 | 75,895 | |||
| Interest expense | (211,455 | ) | (246,174 | ) | (37,000 | ) |
| Change in fair value of warrant derivatives | 70,882 | – | – | |||
| Other income, net | 57,610 | 575 | 86 | |||
| Income before income taxes | 449,672 | 259,357 | 38,981 | |||
| Income tax expenses | (83,487 | ) | (74,733 | ) | (11,233 | ) |
| Net income | 366,185 | 184,624 | 27,748 | |||
| Less: income attributable to noncontrolling interest | 990 | – | – | |||
| Net income attributable to JA Solar Holdings | 365,195 | 184,624 | 27,748 | |||
| Net income per share attributable to ordinary shareholders: | ||||||
| Basic | 1.32 | 0.79 | 0.12 | |||
| Diluted | 1.32 | 0.79 | 0.12 | |||
| Weighted average number of shares outstanding: | ||||||
| Basic | 234,290,842 | 234,321,467 | 234,321,467 | |||
| Diluted | 234,434,640 | 234,339,597 | 234,339,597 | |||
| Comprehensive income | ||||||
| Net income | 366,185 | 184,624 | 27,748 | |||
| Foreign currency translation adjustments, net of tax | (25,984 | ) | 3,572 | 537 | ||
| Other comprehensive (loss)/income | (25,984 | ) | 3,572 | 537 | ||
| Comprehensive income | 340,201 | 188,196 | 28,285 | |||
| Income attributable to noncontrolling interest | 990 | – | – | |||
| Comprehensive income attributable to JA Solar Holdings | 339,211 | 188,196 | 28,285 | |||
| NON-GAAP RECONCILIATION | ||||||
| GAAP net income attributable to JA Solar Holdings | 365,195 | 184,624 | 27,748 | |||
| Change in fair value of warrant derivatives | (70,882 | ) | – | – | ||
| Non-GAAP net income attributable to JA Solar Holdings | 294,313 | 184,624 | 27,748 | |||
| Non-GAAP net income per share attributable to ordinary shareholders: | ||||||
| Basic | 1.06 | 0.79 | 0.12 | |||
| Diluted | 1.06 | 0.79 | 0.12 | |||
| Non-GAAP weighted average number of shares outstanding: | ||||||
| Basic | 234,290,842 | 234,321,467 | 234,321,467 | |||
| Diluted | 234,434,640 | 234,339,597 | 234,339,597 | |||
| JA Solar Holdings Co., Ltd. | |||
| Condensed Consolidated Balance Sheets | |||
| (Unaudited) | |||
| Dec. 31, | Sep 30, | ||
| 2016 | 2017 | 2017 | |
| RMB’000 | RMB’000 | USD’000 | |
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | 2,569,402 | 2,056,706 | 309,126 |
| Restricted cash | 836,761 | 1,078,252 | 162,063 |
| Accounts receivable | 2,753,678 | 2,872,657 | 431,764 |
| Notes receivable | 563,144 | 84,373 | 12,681 |
| Inventories | 2,460,488 | 3,377,184 | 507,595 |
| Advances to suppliers | 282,369 | 389,040 | 58,473 |
| Other current assets | 799,314 | 761,886 | 114,512 |
| Total current assets | 10,265,156 | 10,620,098 | 1,596,214 |
| Property and equipment, net | 5,219,501 | 6,037,223 | 907,403 |
| Project asset | 2,338,648 | 2,832,756 | 425,767 |
| Advances to suppliers | 97,429 | 40,017 | 6,015 |
| Prepaid land use rights | 524,208 | 528,523 | 79,438 |
| Long-term investment | 69,022 | 74,527 | 11,202 |
| Other long term assets | 517,292 | 697,728 | 104,870 |
| Total assets | 19,031,256 | 20,830,872 | 3,130,909 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
| Current liabilities: | |||
| Short-term borrowings | 2,912,866 | 3,272,227 | 491,820 |
| Accounts payable | 2,635,525 | 3,340,136 | 502,027 |
| Advances from customers | 610,718 | 964,325 | 144,939 |
| Current portion of long term borrowings | 525,256 | 961,329 | 144,489 |
| Accrued and other liabilities | 1,966,475 | 1,790,875 | 269,172 |
| Total current liabilities | 8,650,840 | 10,328,892 | 1,552,447 |
| Long-term borrowings | 2,701,438 | 1,920,554 | 288,662 |
| Other long term liabilities | 1,217,648 | 1,931,484 | 290,305 |
| Total liabilities | 12,569,926 | 14,180,930 | 2,131,414 |
| Total JA Solar Holdings shareholders’ equity | 6,461,130 | 6,649,742 | 999,465 |
| Noncontrolling interest | 200 | 200 | 30 |
| Total shareholders’ equity | 6,461,330 | 6,649,942 | 999,495 |
| Total liabilities and shareholders’ equity | 19,031,256 | 20,830,872 | 3,130,909 |
Source: JA Solar Holdings Co., Ltd.
