JA Solar Announces First Quarter 2010 Results
JA Solar today announced financial results for its first quarter 2010, ended March 31, 2010.
Total shipments in the first quarter of 2010 were a record 272MW, compared with fourth quarter 2009 shipments of 231MW, representing sequential growth of 17.7 percent. Tolling business was 26 percent of total shipments. Shipments to international customers expanded substantially during the quarter, representing 36 percent of total shipments and increased 700bps from the previous quarter.
Revenue in the first quarter of 2010 was RMB 1.9 billion ($279.2 million), an increase of 17.1 percent from RMB 1.6 billion ($238.4 million) reported in the fourth quarter of 2009. Gross margin was 22.9 percent in the first quarter of 2010, compared with 20.5 percent in the fourth quarter of 2009, reflecting a high utilization rate and continuous manufacturing process improvement and cost control efforts.
Operating income in the first quarter of 2010 was RMB 352.9 million ($51.7 million), compared with RMB 245.5 million ($36.0 million) in the fourth quarter of 2009. Operating margin was 18.5 percent in the first quarter of 2010, compared with 15.1 percent in the fourth quarter. Our GAAP earnings per diluted ADS in the first quarter were RMB 1.61 ($0.24), compared with RMB 0.84 ($0.12) in the fourth quarter of 2009.
"We are pleased with our strong first quarter results, which saw the highest shipments in our company's history and exceeded our previous guidance in shipment and gross margin," said Dr. Peng Fang, CEO of JA Solar. "We saw extremely strong customer orders during the first quarter of 2010, with robust demand from all major solar markets, as well as growth from the emerging markets. We are seeing even stronger demand in the second quarter, reflecting JA's strong market position, technology, quality, and value proposition. We are taking this opportunity to develop stronger relationships with our existing customers, and cultivate partnerships with new strategic customers. Based on current customer orders, we expect the strong market environment to continue through the end of 2010," he said.
"During the quarter, we continued to win new customers and capture market share, with several new international customers that started delivery in the first quarter. We also made substantial progress in our R&D efforts, achieving 19.1 percent conversion efficiency for our new selective emitter architecture solar cell. We are seeing strong interest from our customers for this new technology, and expect volume shipment in second half of this year. In response to strong market demand and customer requests, we are increasing our manufacturing capacity to support our customers' growth," continued Dr. Fang.
In the first quarter of 2010, the company generated an operating cash flow of RMB 426.4 million ($62.5 million) and incurred capital expenditures of RMB 332.3 million ($48.7 million).
The company continues to maintain a strong balance sheet with cash and cash equivalents of RMB 1.9 billion ($281.6 million), and total working capital of RMB 3.2 billion ($464.7 million) at March 31, 2010. Average receivable turns were 19 days and the average inventory turn was 33 days. The company has no short term loans and total long term bank borrowings were RMB 680 million ($99.6 million). The face value of the convertible bonds, due 2013, outstanding was RMB 1.6 billion ($228.2 million) at March 31, 2010.
Based on robust customer demand for JA Solar's products, the company is raising its outlook for the full year of 2010. The company currently expects shipments to exceed 1GW for 2010, compared with prior guidance of 900MW. Shipments in the second quarter of 2010 are expected to be approximately 275MW.
The company expects to achieve actual solar cell production capacity, which is higher than the nameplate capacity previously reported, of 1.5GW by end of 2010. Module capacity is expected to reach 500MW, and wafer capacity is expected to reach 300MW by the end of year 2010. The revised capital expenditure for the full year is expected to be in the range of $220 million to $250 million, compared with prior guidance of $130 million. JA Solar expects to fund the capacity expansion through its existing cash balance, operating cash flow, as well as credit facilities provided by banks in China.
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