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JA Solar Announces Third Quarter 2017 Results

BEIJING, Nov. 15, 2017 (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, 2017.

Third Quarter 2017 Highlights

  • Total shipments were 1,640.9 megawatts (“MW”), consisting of 1,582.5 MW of modules and 37.9 MW of cells to external customers, and 20.5 MW of modules to the Company’s downstream projects. External shipments were up 30.6% y/y and down 30.0% sequentially

  • Shipments of modules were 1,582.5 MW, an increase of 31.9% y/y and a decrease of 26.3% sequentially

  • Shipments of cells were 37.9 MW, a decrease of 7.3% y/y and 77.3% sequentially

  • Net revenue was RMB 4.3 billion ($652.6 million), an increase of 4.3% y/y and a decrease of 27.1% sequentially

  • Gross margin was 11.8%, a decrease of 200 basis points y/y and 110 basis points sequentially

  • Operating profit was RMB 169.8 million ($25.5 million), compared to RMB 121.4 million ($18.2 million) in the third quarter of 2016, and RMB 255.1 million ($38.3 million) in the second quarter of 2017

  • Net income was RMB 41.9 million ($6.3 million), compared to RMB 44.1 million ($6.6 million) in the third quarter of 2016, and RMB 134.6 million ($20.2 million) in the second quarter of 2017

  • Earnings per diluted ADS were RMB 0.89 or $0.13, compared to RMB 0.86 or $0.13 in the third quarter of 2016, and RMB 2.87 or $0.43 in the second quarter of 2017

  • Cash and cash equivalents were RMB 2.1 billion ($309.1 million), a decrease of RMB 1.2 billion ($176.9 million) during the quarter

  • Non-GAAP earnings1 per diluted ADS were RMB 0.89 or $0.13, compared to RMB 0.86 or $0.13 in the third quarter of 2016, and RMB 2.87 or $0.43 in the second quarter of 2017

Mr. Baofang Jin, Chairman and CEO of JA Solar, commented, "Third quarter results were in-line with our expectations. Total module shipments during the quarter increased more than 30% year-over-year to approximately 1.6 GW, largely driven by demand from our key markets, including China, the U.S., Europe and Japan. Additionally, we maintained gross margin in the low teens through stringent cost control in an adverse pricing environment of polysilicon and wafers during the quarter."

Mr. Jin continued, "We are seeing some uncertainties around the ongoing trade cases in the U.S. and India, which could impact global solar demand in the mid-term. Additionally, accelerated capacity expansion in the industry is reshaping the competition landscape. That being said, we remain confident that our balanced global footprint and flexible business model will enable us to adjust to evolving market conditions as in the past cycles. Our team remains focused on executing our business strategy to provide our customers with high-quality, high-reliability products, as we continue to position JA Solar for long-term growth.”

All shipment and financial figures refer to the quarter ended September 30, 2017, unless otherwise specified. All “year over year” or “y/y” comparisons are against the quarter ended September 30, 2016. All “sequential” comparisons are against the quarter ended June 30, 2017.

Total shipments were 1,640.9 MW, within the guidance range of 1,600 to 1,700 MW. External shipments of 1,620.4 MW increased 30.6% year-over-year and decreased 30.0% sequentially.

External shipments breakdown by product (MW)

2016Q32017Q22017Q3QoQ%YoY%
Modules and module tolling1,200.02,147.51,582.5-26.3%31.9%
Cells and cell tolling40.9167.237.9-77.3%-7.3%
Total1,240.92,314.71,620.4-30.0%30.6%

External shipments breakdown by region (percentage)

2016Q32017Q22017Q3QoQ(pp)YoY(pp)
China32.0%59.2%47.3%-11.9015.30
APAC ex-China25.8%24.9%16.3%-8.60-9.50
Europe6.5%5.1%14.1%9.007.60
North America13.0%8.1%17.2%9.104.20
South America20.2%0.4%0.4%0.00-19.80
Others2.5%2.3%4.7%2.402.20

Net revenue was RMB 4.3 billion ($652.6 million), an increase of 4.3% y/y and a decrease of 27.1% sequentially.

Gross profit of RMB 513.6 million ($77.2 million) decreased 10.6% y/y and 33.4% sequentially. Gross margin was 11.8%, which compares to 13.8% in the year-ago quarter, and 12.9% in the second quarter of 2017.

Total operating expenses of RMB 343.8 million ($51.7 million) were 7.9% of revenue. This compares to operating expenses of 10.9% of revenue in the year-ago quarter, and 8.7% of revenue in the second quarter of 2017.

Operating profit was RMB 169.8 million ($25.5 million), compared to RMB 121.4 million ($18.2 million) in the year-ago quarter, and RMB 255.1 million ($38.3 million) in the second quarter of 2017. Operating margin was 3.9%, compared with 2.9% in the prior-year period and 4.3% in the previous quarter.

Interest expense was RMB 80.3 million ($12.1 million), compared to RMB 75.4 million ($11.3 million) in the year-ago quarter, and RMB 82.6 million ($12.4 million) in the second quarter of 2017.

The change in fair value of warrant derivatives was nil, compared with positive RMB 17 thousand ($2.6 thousand) in the year-ago quarter, and nil in the second quarter of 2017. 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 0.89 or $0.13, compared to earnings per diluted ADS of RMB 0.86 or $0.13 in the year-ago quarter, and earnings per diluted ADS of RMB 2.87 or $0.43 in the second quarter of 2017.

Liquidity

As of September 30, 2017, the Company had cash and cash equivalents of RMB 2.1 billion ($309.1 million), and total working capital of RMB 291.2 million ($43.8 million). Total short-term borrowings were RMB 3.3 billion ($491.8 million). Total long-term borrowings were RMB 2.9 billion ($433.2 million), of which RMB 961.3 million ($144.5 million) were due in one year.

Business Outlook

For the fourth quarter of 2017, the Company expects total cell and module shipments to be in the range of 1,600 to 1,800 MW. Nearly all will be external shipments.

Investor Conference Call / Webcast Details

JA Solar's management will host an earnings conference call on November 15, 2017 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 NumberToll-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 7597129.

A replay of the conference call may be accessed by phone at the following numbers until November 23, 2017. To access the replay, please reference the conference ID 7597129.

Phone NumberToll-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, 2017, which was RMB 6.6533 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, 2017, 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 5.2 GW of solar power products in 2016. 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 and Bac Giang, Vietnam.

For more information, please visit www.jasolar.com.

Contact:

The Blueshirt Group

Ralph Fong
Phone: +1 (415) 489-2195
Email: ralph@blueshirtgroup.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.


JA Solar Holdings Co., Ltd.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
For three months ended
Sep. 30, 2016 Jun. 30, 2017 Sep. 30, 2017 Sep. 30, 2017
RMB'000 RMB'000 RMB'000 USD'000
Net revenues4,162,927 5,953,211 4,341,718 652,566
Cost of sales(3,588,469)(5,182,372)(3,828,137)(575,374)
Gross profit574,458 770,839 513,581 77,192
Selling, general and administrative expenses(406,194)(480,065)(302,786)(45,509)
Research and development expenses(46,871)(35,667)(40,964)(6,157)
Total operating expenses(453,065)(515,732)(343,750)(51,666)
Income from operations121,393 255,107 169,831 25,526
Interest expense(75,378)(82,617)(80,283)(12,067)
Change in fair value of warrant derivatives17 - - -
Other income/(loss), net10,450 13,654 (35,594)(5,350)
Income before income taxes56,482 186,144 53,954 8,109
Income tax expense(12,361)(51,536)(12,061)(1,813)
Net income44,121 134,608 41,893 6,296
Less: loss attributable to noncontrolling interest(715) - - -
Net income attributable to JA Solar Holdings44,836 134,608 41,893 6,296
Net income per share attributable to ordinary shareholders:
Basic0.17 0.57 0.18 0.03
Diluted0.17 0.57 0.18 0.03
Weighted average number of shares outstanding:
Basic 234,290,842 234,311,611 234,360,842 234,360,842
Diluted234,338,817 234,333,946 234,383,172 234,383,172
Comprehensive income
Net income44,121 134,608 41,893 6,296
Foreign currency translation adjustments, net of tax(3,776)(786)3,276 492
Other comprehensive (loss)/income(3,776)(786)3,276 492
Comprehensive income40,345 133,822 45,169 6,788
Loss attributable to noncontrolling interest(715) - - -
Comprehensive income attributable to JA Solar Holdings41,060 133,822 45,169 6,788
NON-GAAP RECONCILIATION
GAAP net income attributable to JA Solar Holdings44,836 134,608 41,893 6,296
Change in fair value of warrant derivatives(17) - - -�
Non-GAAP net income attributable to JA Solar Holdings44,819 134,608 41,893 6,296
Non-GAAP net income per share attributable to ordinary shareholders:
Basic0.17 0.57 0.18 0.03
Diluted0.17 0.57 0.18 0.03
Non-GAAP weighted average number of shares outstanding:
Basic234,290,842 234,311,611 234,360,842 234,360,842
Diluted234,338,817 234,333,946 234,383,172 234,383,172


JA Solar Holdings Co., Ltd.
Condensed Consolidated Statements of Operations
(Unaudited)
For nine months ended
Sep. 30, 2016 Sep. 30, 2017 Sep. 30, 2017
RMB'000 RMB'000 USD'000
Net revenues11,746,233 13,987,335 2,102,315
Cost of sales(9,968,121)(12,269,579)(1,844,134)
Gross profit1,778,112 1,717,756 258,181
Selling, general and administrative expenses(1,114,964)(1,095,709)(164,687)
Research and development expenses(130,513)(117,091)(17,599)
Total operating expenses(1,245,477)(1,212,800)(182,286)
Income from operations532,635 504,956 75,895
Interest expense(211,455)(246,174)(37,000)
Change in fair value of warrant derivatives70,882 - -
Other income, net57,610 575 86
Income before income taxes449,672 259,357 38,981
Income tax expenses(83,487)(74,733)(11,233)
Net income366,185 184,624 27,748
Less: income attributable to noncontrolling interest990 - -
Net income attributable to JA Solar Holdings365,195 184,624 27,748
Net income per share attributable to ordinary shareholders:
Basic1.32 0.79 0.12
Diluted1.32 0.79 0.12
Weighted average number of shares outstanding:
Basic 234,290,842 234,321,467 234,321,467
Diluted 234,434,640 234,339,597 234,339,597
Comprehensive income
Net income366,185 184,624 27,748
Foreign currency translation adjustments, net of tax(25,984)3,572 537
Other comprehensive (loss)/income(25,984)3,572 537
Comprehensive income340,201 188,196 28,285
Income attributable to noncontrolling interest990 - -
Comprehensive income attributable to JA Solar Holdings339,211 188,196 28,285
NON-GAAP RECONCILIATION
GAAP net income attributable to JA Solar Holdings365,195 184,624 27,748
Change in fair value of warrant derivatives(70,882) - -
Non-GAAP net income attributable to JA Solar Holdings294,313 184,624 27,748
Non-GAAP net income per share attributable to ordinary shareholders:
Basic1.06 0.79 0.12
Diluted1.06 0.79 0.12
Non-GAAP weighted average number of shares outstanding:
Basic234,290,842 234,321,467 234,321,467
Diluted234,434,640 234,339,597 234,339,597


JA Solar Holdings Co., Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
Dec. 31,Sep 30,
201620172017
RMB'000RMB'000USD'000
ASSETS
Current assets:
Cash and cash equivalents 2,569,402 2,056,706 309,126
Restricted cash 836,761 1,078,252 162,063
Accounts receivable 2,753,678 2,872,657 431,764
Notes receivable 563,144 84,373 12,681
Inventories 2,460,488 3,377,184 507,595
Advances to suppliers 282,369 389,040 58,473
Other current assets 799,314 761,886 114,512
Total current assets 10,265,156 10,620,098 1,596,214
Property and equipment, net 5,219,501 6,037,223 907,403
Project asset 2,338,648 2,832,756 425,767
Advances to suppliers 97,429 40,017 6,015
Prepaid land use rights 524,208 528,523 79,438
Long-term investment 69,022 74,527 11,202
Other long term assets 517,292 697,728 104,870
Total assets 19,031,256 20,830,872 3,130,909
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings 2,912,866 3,272,227 491,820
Accounts payable 2,635,525 3,340,136 502,027
Advances from customers 610,718 964,325 144,939
Current portion of long term borrowings 525,256 961,329 144,489
Accrued and other liabilities 1,966,475 1,790,875 269,172
Total current liabilities 8,650,840 10,328,892 1,552,447
Long-term borrowings 2,701,438 1,920,554 288,662
Other long term liabilities 1,217,648 1,931,484 290,305
Total liabilities 12,569,926 14,180,930 2,131,414
Total JA Solar Holdings shareholders' equity 6,461,130 6,649,742 999,465
Noncontrolling interest 200 200 30
Total shareholders' equity 6,461,330 6,649,942 999,495
Total liabilities and shareholders’ equity 19,031,256 20,830,872 3,130,909


Source:JA Solar Holdings Co., Ltd.