BEIJING, Nov. 17, 2016 (GLOBE NEWSWIRE) -- 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, 2016.
Third Quarter 2016 Highlights
- Total shipments were 1,240.9 megawatts (“MW”), nearly all of which were modules and cells shipped to external customers. External shipments were up +10.1% y/y and up +0.9% sequentially
- Shipments of modules and module tolling were 1,200.0 MW, an increase of +11.8% y/y and +5.8% sequentially
- Shipments of cells and cell tolling were 40.9 MW, a decrease of 22.8% y/y and 57.0% sequentially
- Net revenue was RMB 4.2 billion ($624.3 million), an increase of +9.0% y/y and +1.2 % sequentially
- Gross margin was 13.8%, a decrease of 390 basis points y/y and 150 basis points sequentially
- Operating profit was RMB 121.4 million ($18.2 million), compared to RMB 299.1 million ($44.9 million) in the third quarter of 2015, and RMB 188.0 million ($28.2 million) in the second quarter of 2016
- Net income was RMB 44.1 million ($6.6 million), compared to RMB 258.6 million ($38.8 million) in the third quarter of 2015, and RMB 164.1 million ($24.6 million) in the second quarter of 2016
- Earnings per diluted ADS were RMB 0.86 or $0.13, compared to RMB 4.42 or $0.66 in the third quarter of 2015, and RMB 2.87 or $0.43 in the second quarter of 2016
- Cash and cash equivalents were RMB 2.0 billion ($298.2 million), a decrease of RMB 25.1million ($3.8 million) during the quarter
- Non-GAAP earnings[1] per diluted ADS were RMB 0.86 or $0.13, compared to RMB 4.35 or $0.65 in the third quarter of 2015, and RMB 2.04 or $0.31 in the second quarter of 2016
Mr. Baofang Jin, Chairman and CEO of JA Solar, commented, “Third quarter results were in-line with our expectations with external shipments and revenue growing 10% and 9% year-over-year, respectively. We executed our strategy to redirect solar product sales to several stronger international markets, as shipments to the domestic market of China declined significantly after demand was pulled forward into Q2. Furthermore, our downstream strategy remains intact. We have approximately 50 MW of downstream projects under construction and intend to develop another 150 to 200 MW in the coming year.”
Mr. Jin continued, “While we anticipate more market headwinds in the near-term, we are confident that our favorable geographic exposure, prudent cost control and flexible business model will enable us to succeed. As market conditions improve, we will be positioned for strong long-term growth.”
All shipment and financial figures refer to the quarter ended September 30, 2016, unless otherwise specified. All “year over year” or “y/y” comparisons are against the quarter ended September 30, 2015. All “sequential” comparisons are against the quarter ended June 30, 2016.
Total shipments were 1,240.9 MW, exceeding the low end of the previously announced guidance range of 1,200 to 1,300 MW. External shipments of 1,240.9 MW increased 10.1% year over year and 0.9% sequentially.
External shipments breakdown by product (MW)
| 2015Q3 | 2016Q2 | 2016Q3 | QoQ% | YoY% | |||||
| Modules and module tolling | 1,073.8 | 1,134.2 | 1,200.0 | 5.8 | % | 11.8 | % | ||
| Cells and cell tolling | 53.0 | 95.1 | 40.9 | -57.0 | % | -22.8 | % | ||
| Total | 1,126.8 | 1229.3 | 1,240.9 | 0.9 | % | 10.1 | % | ||
External shipments breakdown by region (percentage)
| 2015Q3 | 2016Q2 | 2016Q3 | QoQ(pp) | YoY(pp) | |||||||
| China | 53.1 | % | 63.9 | % | 32.0 | % | -31.9pp | -21.1pp | |||
| APAC ex-China | 36.3 | % | 12.0 | % | 25.8 | % | 13.8pp | -10.5pp | |||
| Europe | 7.8 | % | 3.7 | % | 6.5 | % | 2.8pp | -1.3pp | |||
| North America | 1.0 | % | 9.3 | % | 13.0 | % | 3.7pp | 12.0pp | |||
| South America | 0 | % | 9.9 | % | 20.2 | % | 10.3pp | 20.2pp | |||
| Others | 1.8 | % | 1.2 | % | 2.5 | % | 1.3pp | 0.7pp | |||
Net revenue was RMB 4.2 billion ($624.3 million), an increase of +9.0% y/y and +1.2% sequentially.
Gross profit of RMB 574.5 million ($86.1 million) decreased 15.2% y/y and 8.6% sequentially. Gross margin was 13.8%, which compares to 17.7% in the year-ago quarter, and 15.3% in the second quarter of 2016.
Total operating expenses of RMB 453.1 million ($67.9 million) were 10.9% of revenue. This compares to operating expenses of 9.9% of revenue in the year-ago quarter, and 10.7% of revenue in the second quarter of 2016.
Operating profit was RMB 121.4 million ($18.2 million), compared to RMB 299.1 million ($44.9 million) in the year-ago quarter, and RMB 188.0 million ($28.2 million) in the second quarter of 2016. Operating margin was 2.9%, compared with 7.8% in the prior year period and 4.6% in the previous quarter.
Interest expense was RMB 75.4 million ($11.3 million), compared to RMB 58.2 million ($8.7 million) in the year-ago quarter, and RMB 68.8 million ($10.3 million) in the second quarter of 2016.
The change in fair value of warrant derivatives was a gain of RMB 17.0 thousand ($2.6 thousand), compared with RMB 4.4 million ($0.7 million) in the year-ago quarter, and RMB 47.4 million ($7.1 million) in the second quarter of 2016. 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 0.86 or $0.13, compared to earnings per diluted ADS of RMB 4.42 or $0.66 in the year-ago quarter, and earnings per diluted ADS of RMB 2.87 or $0.43 in the second quarter of 2016.
Liquidity
As of September 30, 2016, the Company had cash and cash equivalents of RMB 2.0 billion ($298.2 million), and total working capital of RMB 1.5 billion ($228.8 million). Total short-term borrowings were RMB 2.9 billion ($429.0 million). Total long-term borrowings were RMB 3.1 billion ($467.8 million), of which RMB 536.3 million ($80.4 million) were due in one year.
Business Outlook
For the fourth quarter of 2016, the Company expects total cell and module shipments to be in the range of 1,200 to 1,300 MW, with essentially all being external shipments. Accordingly, full year 2016 shipments are expected to range from 4.9 GW to 5.0 GW, below the Company’s previous guidance of 5.2 GW to 5.5 GW.
Investor Conference Call / Webcast Details
JA Solar's management will host an earnings conference call on November 17, 2016 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 “JA Solar".
A replay of the conference call may be accessed by phone at the following numbers until November 25, 2016. To access the replay, please reference the conference ID 13977699.
| 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, 2016, which was RMB 6.6685 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, 2016, 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 4.0 GW of solar power products in 2015. 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.
For more information, please visit www.jasolar.com.
[1] JA Solar adjusts net income attributable to the Company's ordinary shareholders to exclude (1) changes in fair value of certain warrants granted to certain investors in a registered direct offering (the "Offering") closed on August 16, 2013, and (2) fair value of such warrants exceeding net proceeds from the Offering.
| JA Solar Holdings Co., Ltd. | |||||||||||||
| Condensed Consolidated Statements of Operations and Comprehensive Income | |||||||||||||
| (Unaudited) | |||||||||||||
| For three months ended | |||||||||||||
| Sep. 30, 2015 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | ||||||||||
| RMB'000 | RMB'000 | RMB'000 | USD'000 | ||||||||||
| Net revenues | 3,819,510 | 4,113,592 | 4,162,927 | 624,267 | |||||||||
| Cost of sales | (3,141,961 | ) | (3,485,300 | ) | (3,588,469 | ) | (538,122 | ) | |||||
| Gross profit | 677,549 | 628,292 | 574,458 | 86,145 | |||||||||
| Selling, general and administrative expenses | (344,152 | ) | (396,294 | ) | (406,194 | ) | (60,912 | ) | |||||
| Research and development expenses | (34,278 | ) | (44,043 | ) | (46,871 | ) | (7,029 | ) | |||||
| Total operating expenses | (378,430 | ) | (440,337 | ) | (453,065 | ) | (67,941 | ) | |||||
| Income from operations | 299,119 | 187,955 | 121,393 | 18,204 | |||||||||
| Interest expense | (58,213 | ) | (68,804 | ) | (75,378 | ) | (11,304 | ) | |||||
| Change in fair value of warrant derivatives | 4,394 | 47,417 | 17 | 3 | |||||||||
| Other income, net | 74,301 | 30,878 | 10,450 | 1,567 | |||||||||
| Income before income taxes | 319,601 | 197,446 | 56,482 | 8,470 | |||||||||
| Income tax expense | (61,014 | ) | (33,357 | ) | (12,361 | ) | (1,854 | ) | |||||
| Net income | 258,587 | 164,089 | 44,121 | 6,616 | |||||||||
| Less: income/(loss) attributable to noncontrolling interest | (644 | ) | 388 | (715 | ) | (107 | ) | ||||||
| Net income attributable to JA Solar Holdings | 259,231 | 163,701 | 44,836 | 6,723 | |||||||||
| Net income per share attributable to ordinary shareholders: | |||||||||||||
| Basic | 0.88 | 0.57 | 0.17 | 0.03 | |||||||||
| Diluted | 0.88 | 0.57 | 0.17 | 0.03 | |||||||||
| Weighted average number of shares outstanding: | |||||||||||||
| Basic | 242,328,656 | 234,290,842 | 234,290,842 | 234,290,842 | |||||||||
| Diluted | 242,473,131 | 234,443,142 | 234,338,817 | 234,338,817 | |||||||||
| Comprehensive income | |||||||||||||
| Net income | 258,587 | 164,089 | 44,121 | 6,616 | |||||||||
| Foreign currency translation adjustments, net of tax | (32,876 | ) | (22,068 | ) | (3,776 | ) | (566 | ) | |||||
| Other comprehensive loss | (32,876 | ) | (22,068 | ) | (3,776 | ) | (566 | ) | |||||
| Comprehensive income | 225,711 | 142,021 | 40,345 | 6,050 | |||||||||
| Income/(loss) attributable to noncontrolling interest | (644 | ) | 388 | (715 | ) | (107 | ) | ||||||
| Comprehensive income attributable to JA Solar Holdings | 226,355 | 141,633 | 41,060 | 6,157 | |||||||||
| NON-GAAP RECONCILIATION | |||||||||||||
| GAAP net income attributable to JA Solar Holdings | 259,231 | 163,701 | 44,836 | 6,723 | |||||||||
| Change in fair value of warrant derivatives | (4,394 | ) | (47,417 | ) | (17 | ) | (3 | ) | |||||
| Non-GAAP net income attributable to JA Solar Holdings | 254,837 | 116,284 | 44,819 | 6,720 | |||||||||
| Non-GAAP net income per share attributable to ordinary shareholders: | |||||||||||||
| Basic | 0.87 | 0.41 | 0.17 | 0.03 | |||||||||
| Diluted | 0.87 | 0.41 | 0.17 | 0.03 | |||||||||
| Non-GAAP weighted average number of shares outstanding: | |||||||||||||
| Basic | 242,328,656 | 234,290,842 | 234,290,842 | 234,290,842 | |||||||||
| Diluted | 242,473,131 | 234,443,142 | 234,338,817 | 234,338,817 | |||||||||
| Note: JA Solar excludes net income attributable to the participating warrant holder of RMB 4.5 million (US$0.7 million) from the numerator of basic EPS in the third quarter of 2016. | |||||||||||||
| JA Solar Holdings Co., Ltd. | ||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||
| (Unaudited) | ||||||||||
| For nine months ended | ||||||||||
| Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2016 | ||||||||
| RMB'000 | RMB'000 | USD'000 | ||||||||
| Net revenues | 8,930,960 | 11,746,233 | 1,761,451 | |||||||
| Cost of sales | (7,422,460 | ) | (9,968,121 | ) | (1,494,807 | ) | ||||
| Gross profit | 1,508,500 | 1,778,112 | 266,644 | |||||||
| Selling, general and administrative expenses | (796,614 | ) | (1,114,964 | ) | (167,199 | ) | ||||
| Research and development expenses | (107,012 | ) | (130,513 | ) | (19,572 | ) | ||||
| Total operating expenses | (903,626 | ) | (1,245,477 | ) | (186,771 | ) | ||||
| Income from operations | 604,874 | 532,635 | 79,873 | |||||||
| Interest expense | (183,364 | ) | (211,455 | ) | (31,710 | ) | ||||
| Change in fair value of warrant derivatives | 25,596 | 70,882 | 10,629 | |||||||
| Other income, net | 82,820 | 57,610 | 8,639 | |||||||
| Income before income taxes | 529,926 | 449,672 | 67,431 | |||||||
| Income tax expenses | (100,337 | ) | (83,487 | ) | (12,520 | ) | ||||
| Net income | 429,589 | 366,185 | 54,911 | |||||||
| Less: income/(loss) attributable to noncontrolling interest | (663 | ) | 990 | 148 | ||||||
| Net income attributable to JA Solar Holdings | 430,252 | 365,195 | 54,763 | |||||||
| Net income per share attributable to ordinary shareholders: | ||||||||||
| Basic | 1.45 | 1.32 | 0.20 | |||||||
| Diluted | 1.44 | 1.32 | 0.20 | |||||||
| Weighted average number of shares outstanding: | ||||||||||
| Basic | 246,627,317 | 234,290,842 | 234,290,842 | |||||||
| Diluted | 246,868,295 | 234,434,640 | 234,434,640 | |||||||
| Comprehensive income | ||||||||||
| Net income | 429,589 | 366,185 | 54,911 | |||||||
| Foreign currency translation adjustments, net of tax | (30,810 | ) | (25,984 | ) | (3,897 | ) | ||||
| Other comprehensive loss | (30,810 | ) | (25,984 | ) | (3,897 | ) | ||||
| Comprehensive income | 398,779 | 340,201 | 51,014 | |||||||
| Income/(loss) attributable to noncontrolling interest | (663 | ) | 990 | 148 | ||||||
| Comprehensive income attributable to JA Solar Holdings | 399,442 | 339,211 | 50,866 | |||||||
| NON-GAAP RECONCILIATION | ||||||||||
| GAAP net income attributable to JA Solar Holdings | 430,252 | 365,195 | 54,763 | |||||||
| Change in fair value of warrant derivatives | (25,596 | ) | (70,882 | ) | (10,629 | ) | ||||
| Non-GAAP net income attributable to JA Solar Holdings | 404,656 | 294,313 | 44,134 | |||||||
| Non-GAAP net income per share attributable to ordinary shareholders: | ||||||||||
| Basic | 1.36 | 1.06 | 0.16 | |||||||
| Diluted | 1.36 | 1.06 | 0.16 | |||||||
| Non-GAAP weighted average number of shares outstanding: | ||||||||||
| Basic | 246,627,317 | 234,290,842 | 234,290,842 | |||||||
| Diluted | 246,868,295 | 234,434,640 | 234,434,640 | |||||||
| JA Solar Holdings Co., Ltd. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| Dec. 31, | Sep. 30, | |||||||
| 2015 | 2016 | 2016 | ||||||
| RMB'000 | RMB'000 | USD'000 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | 2,883,294 | 1,988,819 | 298,241 | |||||
| Restricted cash | 663,518 | 759,566 | 113,904 | |||||
| Accounts receivable | 2,872,775 | 3,191,666 | 478,618 | |||||
| Notes receivable | 837,711 | 152,461 | 22,863 | |||||
| Inventories | 1,660,543 | 2,628,699 | 394,197 | |||||
| Advances to suppliers | 473,310 | 274,476 | 41,160 | |||||
| Other current assets | 633,354 | 1,178,816 | 176,774 | |||||
| Total current assets | 10,024,505 | 10,174,503 | 1,525,757 | |||||
| Property and equipment, net | 4,365,348 | 5,201,064 | 779,945 | |||||
| Project asset | 1,028,615 | 2,313,280 | 346,897 | |||||
| Advances to suppliers | 195,341 | 114,359 | 17,149 | |||||
| Prepaid land use rights | 428,495 | 528,265 | 79,218 | |||||
| Long-term investment | 55,169 | 66,994 | 10,046 | |||||
| Other long term assets | 208,430 | 263,173 | 39,465 | |||||
| Total assets | 16,305,903 | 18,661,638 | 2,798,477 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Short-term borrowings | 2,194,957 | 2,860,456 | 428,950 | |||||
| Accounts payable | 2,389,467 | 2,689,848 | 403,366 | |||||
| Advances from customers | 691,867 | 475,496 | 71,305 | |||||
| Current portion of long term borrowings | 238,400 | 536,338 | 80,429 | |||||
| Derivative liabilities-warrants | 71,237 | - | - | |||||
| Accrued and other liabilities | 1,588,885 | 2,086,639 | 312,911 | |||||
| Total current liabilities | 7,174,813 | 8,648,777 | 1,296,961 | |||||
| Long-term borrowings | 2,461,017 | 2,583,444 | 387,410 | |||||
| Other long term liabilities | 752,925 | 1,170,290 | 175,495 | |||||
| Total liabilities | 10,388,755 | 12,402,511 | 1,859,866 | |||||
| Total JA Solar Holdings shareholders' equity | 5,819,695 | 6,160,484 | 923,819 | |||||
| Noncontrolling interest | 97,453 | 98,643 | 14,792 | |||||
| Total shareholders' equity | 5,917,148 | 6,259,127 | 938,611 | |||||
| Total liabilities and shareholders’ equity | 16,305,903 | 18,661,638 | 2,798,477 | |||||