2014

China Sunergy Announces First Quarter 2013 Financial Results Company Grew Revenue by 13.4% Sequentially

Increased Total Shipment by 30.7% Sequentially

NANJING, China, July 1, 2013 /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 first quarter ended March 31, 2013.

Mr. Stephen Cai, CEO of China Sunergy, commented, "We are pleased that despite the industry's persistent oversupply, the Company was able to grow revenue and returned to positive gross margin in the first quarter.  We continued our geographic diversification, and took further steps to reduce operating expenses. As we focus on profitability for the remainder of 2013, we remain optimistic in the solar industry and confident in our Company's future."

First Quarter 2013 Financial Highlights

  • Total revenue was US$61.7 million, an increase of 13.4% from US$54.4 million in the fourth quarter of 2012.
  • Shipments totaled 102.5MW, an increase of 30.7% (24.1MW) from 78.4MW in the fourth quarter of 2012.  Module shipments were 98.3MW, or 95.9% of total shipments.
  • Average selling price ("ASP") for the Company's solar modules was US$0.59 per watt, a 7.8% decrease from that of the fourth quarter of 2012.
  • Conversion costs for cells increased 6.7% sequentially to US$0.16 per watt, from US$0.15 in the fourth quarter of 2012, due to the slightly decreased production volume in the quarter. Conversion cost for modules was US$0.20 per watt, remaining flat quarter-over-quarter.
  • Gross profit was US$0.3 million, and gross margin was 0.4%, compared with gross losses of US$2.0 million and gross margin of negative 3.7% in the fourth quarter of 2012. Non-GAAP[1]gross profit was approximately US$0.6 million, and Non-GAAP gross margin was 1.0%.
  • Net loss attributable to ordinary shareholders improved to US$22.9million, from US$70.5 million a quarter ago. Non-GAAP net loss attributable to ordinary shareholders was US$22.3 million.
  • Net loss attributable to ordinary shareholders per ADS improved to US$1.71, compared to net loss per ADS of US$5.27 in the fourth quarter of 2012. Non-GAAP net loss attributable to ordinary shareholders per ADS was US$1.67.
  • Operating cash outflow was US$41.7 million, compared to cash outflow of US$41.1 million in the fourth quarter of 2012.
  • Cash, cash equivalents and restricted cash totaled US$305.5 million, as of March 31, 2013.

[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.

First Quarter 2013 Financial Review

Total Revenue and Shipments

For the first quarter of 2013, total revenue was US$61.7 million, an increase of 13.4% from the fourth quarter of 2012, primarily due to higher shipments and partially offset by the lower ASP.

Total shipments for the first quarter of 2013 were 102.5MW. France became the largest market for the Company, accounting for 25.6% of total revenue in the first quarter of 2013. Germany was the second largest market in the first quarter, contributing 16.7% of total revenue, followed by India and Japan, contributing 14.5% and 12.5% of total revenue, respectively.

Gross Profit and Gross Margin

Gross profit for the first quarter was US$0.3 million, and gross margin turned positive to 0.4%, compared to gross margin of negative 3.7% for the fourth quarter of 2012. Excluding the inventory provision of US$0.3 million, Non-GAAP gross profit was US$0.6 million, and Non-GAAP gross margin was 1.0% in the first quarter of 2013.

ASP

Module ASP for the first quarter was US$0.59 per watt, which was five cents or 7.8% lower than that of the last quarter. The lowered ASP was primarily caused by an imbalance of supply and demand.

Costs

Blended wafer costs in the first quarter of 2013 were US$0.22 per watt, which was one cent or 4.3% lower than those of the last quarter. Conversion costs of cells and modules manufactured in the first quarter of 2013 were US$0.16 and US$0.20 per watt, respectively.

Operating Expense, Operating Profit/Loss and Net Income/Loss

Operating expenses decreased to US$15.2 million in the first quarter of 2013, from US$40.3 million in the fourth quarter of 2012. The decrease in operating expenses was mainly attributable to the decreased bad debt provision, from US$26.1 million in the fourth quarter of 2012, to US$0.2 million in the first quarter of 2013.

Loss from operations decreased to US$15.0 million in the first quarter of 2013, compared to US$42.4 million in the fourth quarter of 2012. The Non-GAAP loss from operations was US$14.5 million in the first quarter of 2013 and US$15.0 million a quarter ago.

Correspondingly, net loss attributable to ordinary shareholders was US$22.9million and Non-GAAP net loss attributable to ordinary shareholders was US$22.3 million for the first quarter of 2013.

Inventory

Inventories at the end of the first quarter of 2013 totaled US$69.1 million, a decrease of US$14.8 million from the prior quarter, driven by higher shipment and optimized production control. The Company strives to maintain an optimal inventory level and continues to diligently monitor and balance its inventories.

Cash and Cash Flow

As of March 31, 2013, the Company had cash and cash equivalents of US$102.3 million, and restricted cash of US$203.2 million. Operating cash outflow for the first quarter of 2013 increased to US$41.7 million, from US$41.1 million in the fourth quarter of 2012, primarily due to increased investment in solar projects and repayment of account payables.

Capital Expenditures

Capital expenditures in the first quarter of 2013 were US$18.7 million, as the Company continues to expand its R&D Center. The construction of the R&D Center expansion is expected to be completed and operational in the second half of 2013.

Additional Company Updates Subsequent to First Quarter 2013

  • China Sunergy Attended 2013 SNEC 7th PV Power Expo in Shanghai, China, and Introduced New 1500V Module: the Company attended the SNEC 7th (2013) International Photovoltaic Power Generation Conference and Exhibition ("SNEC Expo") from May 13 to May 16, 2013 in Shanghai, China. The Company showcased new 1500V module, and exhibited its QSAR II270-60M module, Waratah 260-60P Poly module and double glass Poly module.
  • Turkey Plant Officially Begun to Accept Bulk Orders: the Company had signed a 2MW solar module supply contract for distributed roof-top projects in the Netherlands with Oskomera Solar Power Solutions B.V. (OSPS), one of the leading PV-system integrator for large scale photovoltaic (PV) projects, wholesales and high volume realization of residential systems in Europe.   The company has shipped the first batch in June and will complete the remainder in July  from its Turkey plant, which not only enables to meet the restricted delivery deadline, but also mitigate the provisional anti-dumping tariffs imposed by EU.
  • China Sunergy Starts to Ship from Turkey Plant: the Company began shipping solar modules from its plant in Istanbul, Turkey, and will deliver a total of approximately 6.4MW from mid-June to August 2013 to a well-known French customer. China Sunergy currently has a total production capacity of 100MW in solar cells and 300MW in solar modules at its Turkey facility. Being the Company's second largest production base, the plant will enhance the Company's global production chain and efficiently serve customers across Europe and globally.
  • China Sunergy Received Approval for Construction of 40MW Solar Project in Xinjiang Autonomous Region, China in June: the Company's wholly-owned subsidiary, Hami Huiteng Solar Power Co., Ltd, has received approval from Xinjiang subordinate of the National Development and Reform Commission for the construction of a 40MW solar project located in Hami city, Xinjiang Autonomous Region, China. The project will be constructed in two phases of 20MW each and will be equipped with China Sunergy's high efficient poly modules.
  • Correction of Clerical Errors. The company's annual report on the Form 20-F filed with the SEC on April 26, 2013 ("20F") disclosed that CSUN Trading (Hong Kong) Co., Limited ("CSUN Trading"), was wholly owned by China Sunergy (Hong Kong) Co., Limited.("Sunergy Hong Kong"), and China Sunergy (Nanjing) Co., Ltd. ("Sunergy Nanjing") and Sunergy Hong Kong held 70% and 30% equity interest of China Sunergy (Yangzhou) Co., Ltd.("Sunergy Yangzhou"), respectively, as of April 26, 2013. The above disclosures are clerical errors. CSUN Trading has become a company with 80% and 20% equity interest held by Sunergy Hong Kong and Sunergy Nanjing, respectively, since September 2012. Sunergy Nanjing and Sunergy Hong Kong held 30% and 70% equity interest of Sunergy Yangzhou, respectively, as of April 26, 2013, which remains unchanged as of today.

Business Outlook

Mr. Cai continued, "In light of the current market environment, we have determined that revenue growth, while desirable, is not our highest priority at this time. For the rest of 2013, we will continue to seek downstream opportunities and disciplined expansions in emerging markets.  In addition, we are moving more production capacity to our Turkey plant, which will require time to reach full utilization. As a result, we made a decision to strategically lower our shipment outlook in 2013, while we aim to achieve higher gross margin and return to earning positive net income."

For the second quarter of 2013, the Company estimates that total shipments will range between 100MW to 110MW. Gross margin for the second quarter of 2013 is expected to reach high single-digit level, based on the average Euro-US dollar exchange rate in June.

For the full year 2013, the Company lowers its total shipment estimates to range between 500MW to 550MW, compared to the previous estimated range of between 550MW to 600MW.

This guidance is based on the current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.

Conference Call

China Sunergy's management will host an earnings conference call on Monday, July 1, 2013 at 8:00 a.m. Eastern Time (Monday, July 1, 2013 at 8:00 p.m. Beijing/Hong Kong time). The management team will be on the call to discuss financial highlights of the first quarter 2013, provide business outlook and answer questions.

To access the conference call, please dial:

United States toll-free:

+1 866 519 4004

International:                

+65 6723 9381

Singapore:                 

+65 6723 9381

China:                       

800 819 0121 (Domestic) /400 620 8038 (Domestic Mobile)

Hong Kong:                

+852 2475 0994

Please ask to be connected to First Quarter 2013 China Sunergy Co., Ltd. Earnings Conference Call and provide the following passcode: 84232027.

China Sunergy will also broadcast a live audio webcast of the conference call. The webcast will be available by visiting the "Investor Relations" section of the company's web site at http://www.csun-solar.com.

Following the earnings conference call, an archive of the call will be available by dialing:

United States toll-free:

+1 855 452 5696

International:               

+61 2 8199 0299

The passcode for replay participants is: 84232027. The telephone replay also will be archived on the "Investor Relations" section of the company's website for seven days following the earnings announcement.

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.

Elaine Li 
Phone: + 86 25 5276 6696
Email: Elaine.li@chinasunergy.com

Asia Bridge Group Limited

Wendy Sun
Phone: + 86 10 8556 9033
Email: wendy.sun@asiabridgegroup.com  

Safe Harbor Statement

This announcement 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 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 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


Mar 31, 2013


Dec 31, 2012


Mar 31, 2012







Sales to third parties

60,855


54,258


67,663

Sales to related parties

843


130


804

Total sales

61,698


54,388


68,467

Cost of goods sold

(61,435)


(56,416)


(67,739)

Gross profit

263


(2,028)


728

Operating expenses:






Selling expenses

(5,756)


(5,464)


(4,339)

General and administrative expenses

(7,628)


(33,146)


(12,067)

Research and development expenses

(1,854)


(1,724)


(2,369)

Total operating expenses

(15,238)


(40,334)


(18,775)

Income(loss) from operations

(14,975)


(42,362)


(18,047)

Interest expense

(7,454)


(7,203)


(6,384)

Interest income

1,557


1,274


631

Other income/(expenses), net

(3,007)


2,569


11,262

Changes in fair value of derivatives

1,410


(371)



Income(loss) before income tax

(22,469)


(46,093)


(12,538)

Income tax benefit(expense)

(460)


(24,444)


2,985

Net income(loss)

(22,929)


(70,537)


(9,553)

Less: non-controlling interest

(70)


(13)


-







Net income (loss) attributable to ordinary shareholders

(22,859)


(70,524)


(9,553)







Net income (loss) attributable to ordinary shareholders  per ADS






Basic

($1.71)


($5.27)


($0.71)

Diluted

($1.71)


($5.27)


($0.71)







Weighted average ADS outstanding






Basic

13,372,292


13,372,292


13,372,292

Diluted

13,372,292


13,372,292


13,372,292

 

China Sunergy Co., Ltd

Unaudited Consolidated Statements of Comprehensive Income (Loss)

(In US$ '000)



For the 3 months ended


Mar 31, 2013


Dec 31, 2012


Mar 31, 2012







 Net income (loss) 

(22,929)


(70,537)


(9,553)

 Other comprehensive income 

-


-


-

     Foreign currency translation adjustments,
     net of tax impact nil for the three months ended March 31, 2013, December 31, 2012 and March 31, 2012

(1,015)


1,314


662







 Comprehensive income (loss) 

(23,944)


(69,223)


(8,891)







 Less:                                                                                         






    Comprehensive loss attributable to noncontrolling interest

(70)


(13)


-

 Comprehensive income (loss) attributable to ordinary shareholders of China Sunergy Co., Ltd

(23,874)


(69,210)


(8,891)

 

China Sunergy Co., Ltd

Unaudited Condensed Consolidated Balance Sheet Information

(In US$ '000)



 Mar 31, 2013

Dec 31, 2012

Assets



Current Assets



  Cash and cash equivalents

102,293

183,312

  Restricted cash

203,181

226,611

  Accounts receivable, net

70,696

77,189

  Other receivable, net

25,911

26,575

  Project assets

17,891

4,761

  Inventories, net

69,093

83,856

    Advance to suppliers, net

6,193

5,320

    Amount due from related parties

89,645

67,007

    Current deferred tax assets

1,391

1,727

    Restricted cash-collateral account

2,009

2,097

    Other current assets

1,339

16

Total current assets

589,642

678,471

Property, plant and equipment, net

214,587

205,707

Prepaid land use rights

28,383

28,547

Deferred tax assets

6,439

5,455

Intangible assets

1,271

1,987

Other long-term assets

2,426

2,918

Total assets

842,748

923,085




Liabilities and equity



Current liabilities



Short-term bank borrowings

501,110

512,419

Accounts payable

119,093

128,347

Notes payable

20,932

38,496

Accrued expenses and other current liabilities

24,666

17,400

Income tax payable

1,598

338

Amount due to related parties

73,950

70,582

Collateral account payable

2,009

2,097

Convertible bond  payable

1,500

1,500

Current defered tax libility

365

519

Total current liabilities

745,223

771,698

Long-term debt

91,120

122,859

Accrued warranty costs

17,857

17,164

Other liabilities

4,307

5,044

Total liabilities

858,507

916,765




Equity:



Ordinary shares: US$0.0001 par value; 267,287,253 shares issued outstanding as of  September 30, 2012 and December 31, 2011.

27

27

Additional paid-in capital

187,225

185,367

Accumulated profit(deficit)

(237,446)

(214,587)

Accumulated other comprehensive income

34,507

35,523

Total equity attributable to China Sunergy Co. Ltd.

(15,687)

6,330

Non-controlling interests

(72)

(10)

Total equity

(15,759)

6,320

Total liabilities and equity

842,748

923,085

 

Reconciliation of Non-GAAP Results of Operations Measures to the Nearest Comparable GAAP Measures

(In US$ '000)





For the 3 months ended


Mar 31, 2013


Dec 31, 2012


Mar 31, 2012









GAAP Gross Profit

263


(2,028)


728


Inventory Write Down

354


1,239


4,025


Non-GAAP Gross Proft

617


(789)


4,753









GAAP Net loss attributable to ordinary shareholders

(22,859)


(70,524)


(9,553)


Inventory Write Down

354


1,239


4,025


Bad Debts provision

162


26,124


5,885


Non-GAAP Net loss attributable to ordinary shareholders

(22,343)


(43,161)


357


Non-GAAP Net loss attributable to ordinary shareholders per ADS







Basic

($1.67)


($3.23)


$0.03


Diluted

($1.67)


($3.23)


$0.03









Weighted average ADS outstanding







Basic

13,372,292


13,372,292


13,372,292


Diluted

13,372,292


13,372,292


13,372,292


SOURCE China Sunergy Co., Ltd.



RELATED LINKS
http://www.csun-solar.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.