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JA Solar Announces Second Quarter 2015 Results

SHANGHAI, China, Aug. 11, 2015 (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 second quarter ended June 30, 2015.

Second Quarter 2015 Highlights

- Total shipments were 790.8 megawatts ("MW"), an increase of 16.0% y/y and 16.0% sequentially

- Shipments of modules and module tolling were 717.4 MW, an increase of 60.9% y/y and 22.8% sequentially

- Shipments of cells and cell tolling were 73.4 MW, a decrease of 68.9% y/y and 24.7% sequentially

- Net revenue was RMB 2.7 billion ($436.8 million), an increase of 11.8% y/y and 12.7% sequentially

- Gross margin was 16.4%, an increase of 120 basis points y/y and 30 basis points sequentially

- Operating profit was RMB 156.1 million ($25.2 million), compared to RMB 89.7 million ($14.5 million) in the second quarter of 2014, and RMB 149.6 million ($24.1 million) in the first quarter of 2015

- Net income was RMB 136.0 million ($21.9 million), compared to RMB 40.1 million ($6.5 million) in the second quarter of 2014, and RMB 35.0 million ($5.6 million) in the first quarter of 2015

- Earnings per diluted ADS were RMB 2.26 ($0.36), compared to RMB 0.59 ($0.10) in the second quarter of 2014, and RMB 0.59 ($0.10) in the first quarter of 2015

- Cash and cash equivalents were RMB 1.7 billion ($282.0 million), a decrease of RMB 149.6 million ($24.1 million) during the quarter

- Non-GAAP earnings1 per diluted ADS were RMB 1.67 ($0.27), compared to RMB 0.87 ($0.14) in the second quarter of 2014, and RMB 0.82 ($0.13) in the first quarter of 2015

Mr. Baofang Jin, chairman and CEO of JA Solar, commented, "We were pleased to close out the first half of the year with shipments higher than previous expectations due to strong demand in several key markets. Solid shipment growth was largely driven by demand in China, which represented 45% of our total shipments during the second quarter. Additionally, we continue to make progress on the establishment of our new cell manufacturing plant in Malaysia.

"As we continue into the second half of the year, we expect industry demand to remain relatively strong, especially in China. We are focused on capturing greater market share in emerging markets, particularly in India and the Americas. Our growing market share and continued development of our downstream project portfolio, supported by the expansion of our manufacturing capacity, will be our key growth drivers for the next several quarters."

Second Quarter 2015 Financial Results

All shipment and financial figures refer to the quarter ended June 30, 2015, unless otherwise specified. All "year over year" or "y/y" comparisons are against the quarter ended June 30, 2014. All "sequential" comparisons are against the quarter ended March 31, 2015.

Total shipments were 790.8 MW, above the high end of the previously announced guidance of 680 to 720 MW. Shipments grew 16.0% both sequentially and year-over-year.

Shipment breakdown by product (MW)
2014Q2 2015Q1 2015Q2 QoQ% YoY%
Modules and module tolling 445.8 584.1 717.4 22.8% 60.9%
Cells and cell tolling 236.0 97.4 73.4 -24.7% -68.9%
Total 681.8 681.5 790.8 16.0% 16.0%
Shipment breakdown by region (percentage)
2014Q2 2015Q1 2015Q2 QoQ(pp) YoY(pp)
China 26.0% 21.4% 45.3% 23.9pp 19.3pp
APAC ex-China 47.1% 53.9% 31.9% -22.0pp -15.2pp
Europe 13.9% 22.6% 14.8% -7.8pp 0.9pp
Americas 11.2% 1.0% 0.6% -0.4pp -10.6pp
Others 1.8% 1.1% 7.4% 6.3pp 5.6pp

Net revenue was RMB 2.7 billion ($436.8 million), an increase of 11.8% y/y and 12.7% sequentially. Growth was mainly driven by strong shipments to key markets such as China.

Gross profit of RMB 444.3 million ($71.7 million) increased 20.8% y/y and 14.9% sequentially. Gross margin was 16.4%, which compares to 15.2% in the year-ago quarter, and 16.1% in the first quarter of 2015. The sequential increase in gross margin was primarily due to a higher percentage of revenue from downstream projects and continued cost reduction, which offset a slight decline in ASP.

Total operating expenses of RMB 288.1 million ($46.5 million) were 10.6% of revenue. As a percentage of revenue, operating expenses were 11.5% in the year-ago quarter, and 9.9% in the first quarter of 2015.

Operating profit was RMB 156.1 million ($25.2 million), compared to RMB 89.7 million ($14.5 million) in the year-ago quarter, and RMB 149.6 million ($24.1 million) in the first quarter of 2015.

Interest expense was RMB 58.6 million ($9.4 million), compared to RMB 54.8 million ($8.8 million) in the year-ago quarter, and RMB 66.6 million ($10.7 million) in the first quarter of 2015.

The change in fair value of warrant derivatives was positive RMB 35.1 million ($5.7 million), compared to negative RMB 16.4 million ($2.6 million) in the year-ago quarter, and negative RMB 13.9 million ($2.2 million) in the first quarter of 2015. The warrants were issued on August 16, 2013 in conjunction with the Company's $96 million registered direct offering. The non-cash gain from the change in fair value was mainly due to the higher stock price as of March 31, 2015 when compared with the stock price as of June 30, 2015.

Earnings per diluted ADS were RMB 2.26 ($0.36), compared to earnings per diluted ADS of RMB 0.59 ($0.10) in the year-ago quarter, and earnings per diluted ADS of RMB 0.59 ($0.10) in the first quarter of 2015.

Liquidity

As of June 30, 2015, the Company had cash and cash equivalents of RMB 1.7 billion ($282.0 million), and total working capital of RMB 3.0 billion ($480.9 million). Total short-term borrowings were RMB 1.9 billion ($307.6 million). Total long-term borrowings were RMB 2.5 billion ($399.3 million), of which RMB 126.6 million ($20.4 million) were due in one year.

Business Outlook

For the third quarter of 2015, the Company expects total cell and module shipments to be in the range of 900 MW to 950 MW. Based on the latest project development and permitting status, the Company now expects to ship 150 MW of modules to its downstream projects in 2015.

Share Buyback Update

As of the date of this press release, the Company has repurchased 1,023,903 of the Company's American Depositary Shares ("ADSs") from the open market, pursuant to a share repurchase program approved by the board of directors and announced on November 18, 2014.

The Company may continue to purchase ADSs from time to time on the open market at prevailing market prices, in accordance with applicable securities laws and subject to restrictions relating to volume, price and timing.

Investor Conference Call / Webcast Details

JA Solar will hold a conference call on Tuesday, August 11, 2015, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing/Hong Kong Time), to discuss the Company's second quarter 2015 results.

Dial-in details for the live conference call are as follows:

International: +65-6713-5090
U.S.: +1-866-519-4004
Hong Kong: +852-3018-6771
Passcode: JA Solar

A live webcast of the conference call will be available on the Company's website at http://www.jasolar.com.

A replay of the call will be available beginning two hours after the live call.

The dial-in details for the replay are as follows:

International: +61-2-8199-0299
United States: +1-855-452-5696
Passcode: 99019064

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 June 30, 2015, which was RMB 6.2000 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 June 30, 2015, 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 3.1 GW of solar power products in 2014. JA Solar is headquartered in Shanghai, China, and maintains production facilities in Shanghai, as well as Hebei, Jiangsu and Anhui provinces.

For more information, please visit www.jasolar.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. Consistent with this approach, the Company believes that disclosing non-GAAP net income per share provides useful supplemental data that, while not a substitute for GAAP net income per share, allows for greater transparency in the review of the Company's financial and operational performance.

JA Solar Holdings Co., Ltd.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
For three months ended
Jun. 30, 2014 Mar. 31, 2015 Jun. 30, 2015 Jun. 30, 2015
RMB'000 RMB'000 RMB'000 USD'000
Net revenues 2,422,402 2,403,354 2,708,096 436,790
Cost of sales (2,054,505) (2,016,660) (2,263,838) (365,135)
Gross profit 367,897 386,694 444,258 71,655
Selling, general and administrative expenses (244,577) (197,982) (254,479) (41,045)
Research and development expenses (33,640) (39,070) (33,663) (5,430)
Total operating expenses (278,217) (237,052) (288,142) (46,475)
Income from operations 89,680 149,642 156,116 25,180
Interest expense (54,750) (66,596) (58,555) (9,444)
Change in fair value of warrant derivatives (16,427) (13,894) 35,096 5,661
Other income/(loss), net 31,729 (21,882) 30,401 4,903
Income before income taxes 50,232 47,270 163,058 26,300
Income tax expense (10,132) (12,295) (27,028) (4,359)
Net income 40,100 34,975 136,030 21,941
Less: income/(loss) attributable to noncontrolling interest 5,284 (554) 535 86
Net income attributable to JA Solar Holdings 34,816 35,529 135,495 21,855
Net income per share attributable to ordinary shareholders:
Basic (Note) 0.12 0.12 0.45 0.07
Diluted 0.12 0.12 0.45 0.07
Weighted average number of shares outstanding:
Basic 242,253,578 248,740,690 248,906,272 248,906,272
Diluted 242,660,788 249,002,930 249,222,492 249,222,492
Comprehensive income
Net income 40,100 34,975 136,030 21,941
Foreign currency translation adjustments, net of tax 2,290 (1,979) 4,045 652
Other comprehensive income/(loss) 2,290 (1,979) 4,045 652
Comprehensive income 42,390 32,996 140,075 22,593
Income/(loss) attributable to noncontrolling interest 5,284 (554) 535 86
Comprehensive income attributable to JA Solar Holdings 37,106 33,550 139,540 22,507
NON-GAAP RECONCILIATION
GAAP net income attributable to JA Solar Holdings 34,816 35,529 135,495 21,855
Change in fair value of warrant derivatives 16,427 13,894 (35,096) (5,661)
Non-GAAP net income attributable to JA Solar Holdings 51,243 49,423 100,399 16,194
Non-GAAP net income per share attributable to ordinary shareholders:
Basic 0.17 0.16 0.33 0.05
Diluted 0.17 0.16 0.33 0.05
Non-GAAP weighted average number of shares outstanding:
Basic 242,253,578 248,740,690 248,906,272 248,906,272
Diluted 242,660,788 249,002,930 249,222,492 249,222,492
Note: JA Solar excludes net income attributable to the participating warrant holder of RMB 23 million (US$3.7 million) from the numerator of basic EPS in the second quarter of 2015.
JA Solar Holdings Co., Ltd.
Condensed Consolidated Statements of Operations
(Unaudited)
For six months ended
Jun. 30, 2014 Jun. 30, 2015 Jun. 30, 2015
RMB'000 RMB'000 USD'000
Net revenues 4,697,912 5,111,450 824,428
Cost of sales (3,949,457) (4,280,498) (690,403)
Gross profit 748,455 830,952 134,025
Selling, general and administrative expenses (436,141) (452,461) (72,978)
Research and development expenses (61,769) (72,733) (11,731)
Total operating expenses (497,910) (525,194) (84,709)
Income from operations 250,545 305,758 49,316
Interest expense (111,517) (125,151) (20,186)
Change in fair value of warrant derivatives (49,982) 21,202 3,420
Other income, net 60,853 8,519 1,374
Income before income taxes 149,899 210,328 33,924
Income tax expenses (24,788) (39,323) (6,342)
Net income 125,111 171,005 27,582
Less: income/(loss) attributable to noncontrolling interest 7,661 (19) (3)
Net income attributable to JA Solar Holdings 117,450 171,024 27,585
Net income per share attributable to ordinary shareholders:
Basic 0.40 0.57 0.09
Diluted 0.34 0.57 0.09
Weighted average number of shares outstanding:
Basic 235,603,290 248,824,410 248,824,410
Diluted 236,439,213 249,113,640 249,113,640
Comprehensive loss
Net income 125,111 171,005 27,582
Foreign currency translation adjustments, net of tax (3,567) 2,066 333
Other comprehensive income/(loss) (3,567) 2,066 333
Comprehensive income 121,544 173,071 27,915
Income/(loss) attributable to noncontrolling interest 7,661 (19) (3)
Comprehensive income attributable to JA Solar Holdings 113,883 173,090 27,918
NON-GAAP RECONCILIATION
GAAP net income attributable to JA Solar Holdings 117,450 171,024 27,585
Change in fair value of warrant derivatives 49,982 (21,202) (3,420)
Non-GAAP net income attributable to JA Solar Holdings 167,432 149,822 24,165
Non-GAAP net income per share attributable to ordinary shareholders:
Basic 0.57 0.50 0.08
Diluted 0.52 0.50 0.08
Non-GAAP weighted average number of shares outstanding:
Basic 235,603,290 248,824,410 248,824,410
Diluted 236,439,213 249,113,640 249,113,640
JA Solar Holdings Co., Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
Dec. 31, Jun. 30,
2014 2015 2015
RMB'000 RMB'000 USD'000
ASSETS
Current assets:
Cash and cash equivalents 2,155,009 1,748,670 282,043
Restricted cash 833,084 762,125 122,923
Accounts receivable 2,461,741 2,693,455 434,428
Inventories 1,886,268 2,251,623 363,165
Advances to suppliers 337,595 406,495 65,564
Other current assets 926,806 849,688 137,047
Total current assets 8,600,503 8,712,056 1,405,170
Property and equipment, net 4,166,747 4,018,637 648,167
Project asset 651,494 660,396 106,516
Advances to suppliers 451,704 303,131 48,892
Long-term investment 13,524 54,740 8,829
Other long term assets 599,806 589,384 95,062
Total assets 14,483,778 14,338,344 2,312,636
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings 2,275,533 1,907,296 307,628
Accounts payable 2,770,299 2,372,823 382,713
Advances from customers 243,959 226,478 36,529
Current portion of long term borrowings 22,000 126,600 20,419
Derivative liabilities-warrants 105,785 84,425 13,617
Accrued and other liabilities 1,162,510 1,012,699 163,339
Total current liabilities 6,580,086 5,730,321 924,245
Long-term borrowings 1,902,400 2,348,800 378,839
Other long term liabilities 534,424 612,495 98,790
Total liabilities 9,016,910 8,691,616 1,401,874
Total JA Solar Holdings shareholders' equity 5,360,172 5,540,050 893,556
Noncontrolling interest 106,696 106,678 17,206
Total shareholders' equity 5,466,868 5,646,728 910,762
Total liabilities and shareholders' equity 14,483,778 14,338,344 2,312,636

CONTACT: ICR, LLC Victor Kuo Phone: +86 (10) 6583-7526 Email: victor.kuo@icrinc.com

Source:JA Solar Holdings Co., Ltd.