NANJING, China, March 2,
2015 /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
second quarter ended June 30,
2014.
Mr. Tingxiu Lu, Chairman and CEO
of China Sunergy, commented, "We are pleased that our global
manufacturing base, sales network and leading technology enabled us
to capture opportunities in both Europe and Asia, driving strong sequential shipment
growth and higher gross margin in the second quarter of 2014.
Reflecting the solid second quarter results, we remain comfortable
in achieving our previously-stated full-year 2014 total shipment
estimates of 750 MW to 800 MW."
"Since my return in September
2014, we have taken many steps to improve operations,
including the appointment of our new auditor in December, which
initially required additional time to complete our quarterly
financial reporting. I would like to sincerely thank our finance
team and auditor for their tireless efforts in completing the
second quarter's financial reporting, which now brings the Company
current in its reporting obligations. We are committed to timely
completing our 2014 annual audit and aim to report our results for
the second half of 2014 in April
2015."
Second Quarter 2014 Financial Highlights
- Total revenue was US$88.5
million, an increase of 41.0% from US$62.7 million in the first quarter of 2014.
Self-branded revenue totaled US$80.8
million and OEM revenue was US$6.4
million.
- Shipments totaled 184.5MW, an increase of 31.6% (44.3MW)
from 140.2MW in the first quarter of 2014. Module shipments,
including module processed under OEM arrangement of 27.0MW, were
135.6MW. Cell shipments, including cell processed under OEM
arrangements of 21.2MW, were 48.9MW.
- Average selling price ("ASP") for the Company's solar
modules, excluding those processed under OEM arrangements, was
US$0.66 per watt, unchanged from that
of the previous quarter.
- Gross profit was US$5.5
million on gross margin of 6.2%, compared with US$2.3 million on gross margin of 3.7% in the
first quarter of 2014. Non-GAAP[1]gross
profit was US$7.2 million, and
non-GAAP gross margin was 8.1%.
- Net loss attributable to ordinary shareholders
was US$5.7 million, an improvement
from US$14.7 million in the first
quarter of 2014. Non-GAAP net loss attributable to ordinary
shareholders was US$0.8 million.
- Net loss attributable to ordinary shareholders per
ADS was US$0.39, an improvement
from US$0.99 in the first quarter of
2014. Non-GAAP net loss attributable to ordinary shareholders per
ADS was US$0.05.
- Cash, cash equivalents and restricted cash totaled
US$232.7 million, as of June 30, 2014.
[1] China Sunergy's
Non-GAAP financial measures are its corresponding GAAP financial
measures as adjusted by excluding costs related to certain charges,
including inventory and bad debt provisions. Please refer to
"Reconciliations of Non-GAAP Financial Measures to the Nearest
Comparable GAAP Measures" at the end of this press
release.
|
Second Quarter 2014 Financial Review
Total Revenue and Shipments
For the second quarter of 2014, total revenue was US$88.5 million, an increase of 41.0% from
US$62.7million in the first quarter
of 2014. The increase in total revenue was mainly attributable to
the higher shipments in the Company's self-branded cells and module
sales, while the average selling prices remained flat compared with
the prior quarter. Revenue from the Company's self-branded modules
and cells business totaled US$80.8
million or 91.3% of the total revenue, while revenue from
the modules and cells processed under OEM arrangements, was
US$6.4 million, or for 7.2% of total
revenue.
Total shipments for the second quarter of 2014 were 184.5MW, an
increase of 31.6% from 140.2MW in the prior quarter. The sequential
increase in total shipment was primarily due to the higher
shipments to France, China and India during the quarter. Total module
shipments, including module processed under OEM arrangement of
27.0MW, were 135.6MW for the second quarter of 2014. Total cell
shipments, including cell processed under OEM arrangements of
21.2MW, were 48.9MW for the second quarter of 2014.
Asia continued to be the
largest market for the Company, accounting for 54.7% of total
revenue in the second quarter of 2014, with China, Japan
and India accounting for 22.7%,
15.0% and 14.5%, respectively. Sales to European markets
represented 42.4% of total revenue in the second quarter of 2014,
mainly contributed by France and
Germany, which contributed 30.0%
and 6.6% of the total revenue, respectively.
ASP
ASP for the Company's self-branded module during the second
quarter of 2014 was US$0.66 per watt,
remained flat compared with that of the previous quarter. ASP for
the Company's self-branded cell during the second quarter of 2014
was US$0.32 per watt, compared with
$0.28 per watt in the previous
quarter.
Wafer and Conversion Costs
Blended wafer costs in the second quarter of 2014 were
US$0.24 per watt, which was
one cent or 4.3% higher than the
previous quarter. Conversion costs of cells and modules
manufactured in the second quarter of 2014 were US$0.14 and US$0.19
per watt, respectively, compared with US$0.14 and US$0.20
per watt, respectively, in the previous quarter.
Gross Profit and Gross Margin
Gross profit for the second quarter of 2014 was US$5.5 million on gross margin of 6.2%, this
compared with gross profit of US$2.3
million on gross margin of 3.7% for the first quarter of
2014. The sequential increase in gross profit and expansion of
gross margin was mainly attributable to higher sales generated from
the Company's self-branded cell and modules. Excluding inventory
provision of US$1.7 million, non-GAAP
gross profit was US$7.2 million and
non-GAAP gross margin was 8.1% in the second quarter of 2014.
Operating Expenses, Operating Loss and Net
Loss
Operating expenses increased to US$14.2
million in the second quarter of 2014, from US$10.1 million in the first quarter of 2014. The
sequential increase in operating expenses was primarily due to a
US$4.0 million increase in general
and administration expenses. During the second quarter of 2014,
general and administration expenses were US$10.4 million, which included a bad debt
provision of US$3.2 million, whereas
the Company reversed US$0.4 million
bad debt in the first quarter of 2014.
Loss from operations was US$8.7
million in the second quarter of 2014, compared with
US$7.8 million in the first quarter
of 2014. During the second quarter of 2014, the Company sold its
idle subsidiary, China Sunergy(Shanghai).Co.Ltd, correlated to
which, the Company generated other income of US$10.2 million, compared to other expenses of
US$1.2 million in the previous
quarter.
Correspondingly, net loss attributable to ordinary shareholders
improved by US$9.0 million to US$5.7
million in the second quarter of 2014, compared with
US$14.7 million from the prior
quarter. Excluding inventory provision of US$1.7 million and bad debt provision of
US$3.2 million, non-GAAP net loss
attributable to ordinary shareholders was US$0.8 million for the second quarter of
2014.
Amount Due from/to Related Parties
Amount due from related parties totaled US$77.2 million as of June
30, 2014, an increase of US$9.7
million compared to US$67.5
million as of March 31, 2014.
Amount due to related parties totaled US$8.6
million as of June 30, 2014, a
decrease of US$24.4 million compared
to US$33.0 million as of March 31, 2014.
Inventory
Inventories at the end of the second quarter of 2014 totaled
US$55.9 million, a decrease of
US$8.2 million from US$64.1 at the end of March 31 2014, which is mainly due to higher
shipment during the quarter.
Cash Position
As of June 30, 2014, the Company
had cash and cash equivalents of US$30.8
million, and restricted cash of US$201.9 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
.
Investor and Media Contacts:
China Sunergy Co., Ltd.
Zhuo
Wang
Phone:
+86-25-5276-6696
Email: IR@chinasunergy.com
Asia Bridge Group Limited
Wendy Sun
Phone: + 86-10-8556-9033
Email: wendy.sun@asiabridgegroup.com
Use of Non-GAAP Financial Measures
The Company has provided the three-month gross profit, gross
margin, net income and earnings per ADS on a non-GAAP basis, which
excludes inventory and bad debt provisions. The Company believes
that both management and investors benefit from referring to these
non-GAAP financial measures in assessing its financial performance
and liquidity and when planning and forecasting future periods.
These non-GAAP operating measures are useful for understanding and
assessing underlying business performance and operating trends. The
Company expects to continue providing gross profit, gross margin,
net income and earnings per ADS on a non-GAAP basis using a
consistent method on a quarterly basis. Investors should not view
non-GAAP results on a stand-alone basis or as a substitute for
results under GAAP, or as being comparable to results reported or
forecasted by other companies, and should refer to the
reconciliation of non-GAAP measures to GAAP measures for the
indicated periods in this press release.
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 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
|
|
|
|
Jun 30, 2014
|
Mar 31, 2014
|
Jun 30, 2013
|
Total
sales
|
88,461
|
62,744
|
71,908
|
Cost of goods
sold
|
(82,961)
|
(60,432)
|
(65,247)
|
Gross
profit
|
5,500
|
2,312
|
6,661
|
Operating
expenses:
|
|
|
|
Selling
expenses
|
(3,224)
|
(3,209)
|
(4,610)
|
General and
administrative expenses
|
(10,403)
|
(6,398)
|
(5,053)
|
Research and
development expenses
|
(568)
|
(515)
|
(1,579)
|
Total operating
expenses
|
(14,195)
|
(10,122)
|
(11,242)
|
Income(loss) from
operations
|
(8,695)
|
(7,810)
|
(4,581)
|
Interest
expense
|
(7,172)
|
(6,811)
|
(5,076)
|
Interest
income
|
1,476
|
1,252
|
1,785
|
Other
income/(expenses), net
|
10,179
|
(1,244)
|
7,451
|
Income(loss)
before income tax
|
(4,212)
|
(14,613)
|
(421)
|
Income tax
benefit(expense)
|
(1,131)
|
(119)
|
(1,351)
|
Net
income(loss)
|
(5,343)
|
(14,732)
|
(1,772)
|
Less: non-controlling
interest
|
383
|
1
|
(361)
|
|
|
|
|
Net income (loss)
attributable to ordinary shareholders
|
(5,726)
|
(14,733)
|
(1,411)
|
|
|
|
|
Net income (loss)
attributable to ordinary shareholders per ADS
|
|
|
|
Basic
|
($0.39)
|
($0.99)
|
($0.11)
|
Diluted
|
($0.39)
|
($0.99)
|
($0.11)
|
|
|
|
|
Weighted average
ADS outstanding
|
|
|
|
Basic
|
14,849,292
|
14,849,292
|
13,372,292
|
Diluted
|
14,849,292
|
14,849,292
|
13,372,292
|
China Sunergy Co.,
Ltd
Unaudited
Condensed Consolidated Balance Sheet Information
(In
US$'000)
|
|
|
Jun 30, 2014
|
Mar 31, 2014
|
Jun 30, 2013
|
Assets
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
30,792
|
30,132
|
60,090
|
Restricted
cash
|
201,914
|
200,267
|
159,666
|
Accounts receivable,
net
|
72,874
|
68,795
|
78,173
|
Other receivable,
net
|
25,423
|
27,762
|
22,583
|
Project
assets
|
10,460
|
10,343
|
18,557
|
Inventories,
net
|
55,878
|
64,094
|
46,484
|
Advance to suppliers,
net
|
6,401
|
6,411
|
4,664
|
Amount due from
related parties
|
77,156
|
67,549
|
132,101
|
Current deferred tax
assets
|
1,239
|
1,735
|
1,579
|
Restricted
cash-collateral account
|
-
|
-
|
3,131
|
Assets held for
sale
|
-
|
28,904
|
|
Total current
assets
|
482,137
|
505,992
|
527,028
|
Property, plant and
equipment, net
|
229,121
|
228,768
|
219,727
|
Prepaid land use
rights
|
23,659
|
23,803
|
28,218
|
Deferred tax
assets
|
7,399
|
7,831
|
6,628
|
Long-term
investment
|
1
|
-
|
|
Intangible
assets
|
-
|
-
|
524
|
Other long-term
assets
|
5,267
|
5,410
|
1,930
|
Total
assets
|
747,584
|
771,804
|
784,055
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Current
liabilities
|
|
|
|
Short-term bank
borrowings
|
375,212
|
365,414
|
472,229
|
Accounts
payable
|
88,926
|
86,032
|
126,837
|
Notes
payable
|
18,634
|
27,779
|
20,326
|
Accrued expenses and
other current liabilities
|
16,604
|
17,858
|
19,584
|
Income tax
payable
|
3,767
|
3,718
|
3,473
|
Amount due to related
parties
|
8,644
|
32,988
|
25,800
|
Collateral account
payable
|
-
|
-
|
3,131
|
Liability held for
sale
|
-
|
44
|
|
Current deferred tax
liability
|
-
|
7
|
219
|
Total current
liabilities
|
511,787
|
533,840
|
671,599
|
Long-term
debt
|
264,029
|
265,340
|
103,134
|
Long-term
payables
|
603
|
838
|
|
Accrued warranty
costs
|
20,855
|
20,244
|
18,813
|
Other
liabilities
|
14,790
|
10,308
|
9,046
|
Total
liabilities
|
812,064
|
830,570
|
802,592
|
|
|
|
|
Equity:
|
|
|
|
Ordinary shares: par
value $0.0001; 463,247,600 shares
authorized, 267,287,253 shares issued and outstanding
as of
June 30, 2013 and 240,701,253 issued and outstanding
as of March 31, 2014 and June 30, 2014
|
24
|
24
|
27
|
Additional paid-in
capital
|
185,367
|
185,367
|
185,367
|
Treasury shares (at
par value)
|
3
|
3
|
|
Accumulated
profit(deficit)
|
(285,653)
|
(279,929)
|
(238,857)
|
Accumulated other
comprehensive income
|
35,898
|
36,414
|
35,344
|
Total equity
attributable to China Sunergy Co. Ltd.
|
(64,361)
|
(58,121)
|
(18,119)
|
Non-controlling
interests
|
(119)
|
(645)
|
(418)
|
Total
equity
|
(64,480)
|
(58,766)
|
(18,537)
|
Total liabilities
and equity
|
747,584
|
771,804
|
784,055
|
Reconciliation of
Non-GAAP results of Operations Measures to the Nearest
Comparable GAAP Measures
(In US$'000,
except ADS and per ADS data)
|
|
|
For the 3 months
ended
|
|
|
|
Jun 30, 2014
|
Mar 31, 2014
|
Jun 30, 2013
|
|
|
|
|
GAAP gross
profit
|
5,500
|
2,312
|
6,661
|
Inventory write
down
|
1,706
|
547
|
12
|
Non-GAAP gross
Profit
|
7,206
|
2,859
|
6,673
|
|
|
|
|
GAAP net loss
attributable to ordinary shareholders
|
(5,726)
|
(14,733)
|
(1,411)
|
Inventory Write
Down
|
1,706
|
547
|
12
|
Bad Debts
provision
|
3,209
|
(364)
|
(2,031)
|
Non-GAAP net loss
attributable to ordinary shareholders
|
(811)
|
(14,550)
|
(3,430)
|
Non-GAAP net loss
attributable to ordinary shareholders
per ADS
|
|
|
|
Basic
|
($0.05)
|
($0.98)
|
($0.26)
|
Diluted
|
($0.05)
|
($0.98)
|
($0.26)
|
|
|
|
|
Weighted average
ADS outstanding
|
|
|
|
Basic
|
14,849,292
|
14,849,292
|
13,372,292
|
Diluted
|
14,849,292
|
14,849,292
|
13,372,292
|
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SOURCE China Sunergy Co., Ltd.