China Sunergy Announces Second Quarter 2015 Financial Results
NANJING, China, Nov. 23, 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, 2015.
Second Quarter 2015 Financial Highlights
- Total revenue was US$87.5 million, a decrease of 4.3% from US$91.5 million in the first quarter of 2015. The revenue for self-branded products totaled US$86.6 million and the revenue for the products processed under the OEM arrangement was US$0.9 million.
- Shipments totaled 184.5MW, a decrease of 3.8% (7.4MW) from 191.9MW in the first quarter of 2015. Module shipments, including module processed under OEM arrangement of 16.8MW, were 148.9MW. Cell shipments were 35.6MW.
- Average selling price ("ASP") for the Company's modules, excluding those processed under OEM arrangements, was US$0.58 per watt, unchanged from the previous quarter.
- Gross profit was US$6.1 million and gross margin was 6.9%, compared with gross profit of US$10.3 million on gross margin of 11.3% in the first quarter of 2015.
- Net lossattributable to ordinary shareholders was US$10.5 million, compared with US$12.2 million in the first quarter of 2015.
- Net loss attributable to ordinary shareholders per ADS was US$0.71, compared with US$0.82 in the first quarter of 2015.
- Cash, cash equivalents and restricted cash totaled US$148.5 million as of June 30, 2015.
Second Quarter 2015 Financial Review
Total Revenue and Shipments
For the second quarter of 2015, total revenue was US$87.5 million, compared with US$91.5 million in the first quarter of 2015. The decrease in revenue was mainly due to lower shipments in OEM arrangement for solar modules. Revenue from the Company's self-brand modules and cells business totaled US$86.6 million or 99.0% of the total revenue, while revenue generated from the modules processed under OEM arrangement, was US$0.9 million, or 1.0% of total revenue. Since self-branded module and cell businesses are more profitable than OEM arrangements, and the Company managed to obtain more self-branded orders in the second quarter of 2015, the Company actively utilized more capacity for self-branded modules and cells other than OEM arrangements during the period.
Total shipments for the second quarter of 2015 were 184.5MW, a decrease of 3.8% from 191.9MW in the previous quarter. The decrease in total shipments was primarily resulted from less OEM arrangement for solar modules. Total module shipments, including modules processed under OEM arrangement of 16.8MW, were 148.9MW for the second quarter of 2015. Total self-branded cell shipments were 35.6MW for the second quarter of 2015. The Company did not arrange OEM orders for solar cells in the second quarter of 2015.
Sales revenue derived from Asian market accounted for 39.3% of total revenue in the second quarter of 2015 as a result of lower shipments to China, Japan and India markets, while revenue generated from American market dramatically increased and accounted for 34.4% of total revenue. In addition, sales to European market represented 25.2% of total revenue in the quarter ended June 30, 2015.
ASP
ASP for the Company's self-branded modules for the second quarter of 2015 was US$0.58 per watt, unchanged from the previous quarter. ASP for the Company's self-branded cells during the second quarter of 2015 was US$0.26 per watt, compared with $0.27 per watt in the previous quarter.
Wafer and Conversion Costs
Blended wafer costs in the second quarter of 2015 were US$0.20 per watt, a decrease of two cents as compared to previous quarter. Conversion costs of cells and modules manufactured in the second quarter of 2015 were US$0.14 and US$0.18 per watt, respectively, compared with US$0.13 and US$0.18 per watt, respectively, in the previous quarter. The one-cent increase in the conversion costs of cells was primarily due to the lower output.
Gross Profit and Gross Margin
Gross profit for the second quarter of 2015 was US$6.1 million on gross margin of 6.9%, compared with gross profit of US$10.3 million on gross margin of 11.3% for the first quarter of 2015. The decrease in gross profit and gross margin was primarily due to the decreased average selling price and increased unit cost for the modules shipped from the Company's plants in mainland China.
Operating Expenses, Operating Income (Loss) and Net Loss
Operating expenses increased to US$13.9 million in the second quarter of 2015, from US$4.8 million in the first quarter of 2015. The sequential increase in operating expenses was primarily due to the increase in selling expenses and general and administration expenses. During the second quarter of 2015, selling expenses were US$4.2 million, an increase of US$1.5 million as compared to previous quarter. The increase was mainly due to higher shipping costs occurred at the Company's Turkey plant as a result of its higher shipments. General and administration expenses were US$8.7 million during the second quarter of 2015, increased by US$7.3 million as compared to US$1.4 million in the first quarter of 2015. The increase was attributable to the increase in bad debt provision and insurance expenses. The Company reversed approximately US$4.4 million of bad debt provision in the first quarter of 2015 caused by the depreciation of Euro against RMB, which significantly lowered the total amount of general and administration expenses.
Loss from operations was US$7.8 million in the second quarter of 2015, compared with income from operations of US$5.5 million in the first quarter of 2015. In addition, the Company had other income of US$1.7 million versus other expenses of US$14.3 million in the previous quarter, which was primarily due to the foreign exchange gain incurred from the depreciation of RMB against Euro.
Correspondingly, net loss attributable to ordinary shareholders was US$10.5 million in the second quarter of 2015, compared with US$12.2 million in the previous quarter.
Amount Due from/to Related Parties
Amount due from related parties totaled US$90.5 million as of June 30, 2015, an increase of US$1.1 million compared to US$89.4 million as of March 31, 2015. Amount due to related parties totaled US$3.6 million as of June 30, 2015, a decrease of US$3.5 million compared to US$7.1 million as of March 31, 2015.
Inventory
Inventories at the end of the second quarter of 2015 totaled US$85.9 million, an increase of US$5.5 million from US$80.4 million at the end of March 31, 2015, which is mainly due to lower shipment during the quarter.
Cash Position
As of June 30, 2015, the Company had cash and cash equivalents of US$38.5 million, and restricted cash of US$110.0 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 |
|||
| Jun 30, 2015 |
Mar 31, 2015 |
Jun 30, 2014 |
|
| Total sales |
87,504 |
91,469 |
88,461 |
| Cost of goods sold |
(81,439) |
(81,146) |
(82,961) |
| Gross profit |
6,065 |
10,323 |
5,500 |
| Operating expenses: |
|||
| Selling expenses |
(4,224) |
(2,717) |
(3,224) |
| General and administrative expenses |
(8,745) |
(1,386) |
(10,403) |
| Research and development expenses |
(897) |
(738) |
(568) |
| Total operating expenses |
(13,867) |
(4,841) |
(14,195) |
| Income (loss) from operations |
(7,801) |
5,482 |
(8,695) |
| Interest expense |
(5,660) |
(6,338) |
(7,172) |
| Interest income |
1,414 |
1,500 |
1,476 |
| Other income/(expenses), net |
1,666 |
(14,319) |
10,179 |
| Changes in fair value of derivatives |
- |
- |
0 |
| Income (loss) before income tax |
(10,381) |
(13,675) |
(4,212) |
| Income tax benefit (expense) |
(112) |
819 |
(1,131) |
| Net income (loss) |
(10,493) |
(12,856) |
(5,343) |
| Less: non-controlling interest |
21 |
(653) |
383 |
| Net income (loss) attributable to ordinary shareholders |
(10,514) |
(12,203) |
(5,726) |
| Net income (loss) attributable to ordinary shareholders |
|||
| Basic |
($0.71) |
($0.82) |
($0.39) |
| Diluted |
($0.71) |
($0.82) |
($0.39) |
| Weighted average ADS outstanding |
|||
| Basic |
14,849,292 |
14,849,292 |
14,849,292 |
| Diluted |
14,849,292 |
14,849,292 |
14,849,292 |
| China Sunergy Co., Ltd |
|||
| Unaudited Condensed Consolidated Balance Sheet Information |
|||
| (In US$'000) |
|||
| Jun 30, 2015 |
Mar 31, 2015 |
Jun 30, 2014 |
|
| Assets |
|||
| Current Assets |
|||
| Cash and cash equivalents |
38,476 |
32,421 |
30,792 |
| Restricted cash |
109,984 |
147,400 |
201,914 |
| Accounts receivable, net |
64,634 |
61,028 |
72,874 |
| Other receivable, net |
30,255 |
22,647 |
25,423 |
| Project assets |
54 |
- |
10,460 |
| Inventories, net |
85,945 |
80,375 |
55,878 |
|
Advance to suppliers, net |
8,701 |
7,401 |
6,401 |
|
Amount due from related parties |
90,518 |
89,373 |
77,156 |
|
Current deferred tax assets |
1,613 |
1,554 |
1,239 |
| Total current assets |
430,180 |
442,199 |
482,137 |
| Property, plant and equipment, net |
214,886 |
216,913 |
229,121 |
| Prepaid land use rights |
23,087 |
23,230 |
23,659 |
| Deferred tax assets |
10,135 |
9,698 |
7,399 |
| Long-term investment |
1 |
1 |
1 |
| Intangible assets |
6 |
1 |
- |
|
Other long-term assets |
4,930 |
5,021 |
5,267 |
| Total assets |
683,225 |
697,063 |
747,584 |
| Liabilities and equity |
|||
| Current liabilities |
|||
| Short-term bank borrowings |
310,634 |
341,447 |
375,212 |
| Accounts payable |
147,894 |
122,015 |
88,926 |
| Notes payable |
4,364 |
9,384 |
18,634 |
| Accrued expenses and other current liabilities |
26,249 |
21,948 |
16,604 |
| Income tax payable |
4,818 |
4,257 |
3,767 |
|
Amount due to related parties |
3,563 |
7,077 |
8,644 |
| Total current liabilities |
497,522 |
506,128 |
511,787 |
| Long-term debt |
271,238 |
272,092 |
264,029 |
| Long-term payables |
- |
- |
603 |
| Accrued warranty costs |
23,356 |
22,795 |
20,855 |
| Other liabilities |
15,614 |
14,610 |
14,790 |
| Total liabilities |
807,730 |
815,625 |
812,064 |
| 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) |
(344,011) |
(333,496) |
(285,653) |
| Accumulated other comprehensive income |
34,654 |
30,548 |
35,898 |
| Total equity attributable to China Sunergy Co. Ltd. |
(123,963) |
(117,554) |
(64,361) |
| Non-controlling interests |
(542) |
(1,008) |
(119) |
| Total equity |
(124,505) |
(118,562) |
(64,480) |
| Total liabilities and equity |
683,225 |
697,063 |
747,584 |
SOURCE China Sunergy Co., Ltd.
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