SAN FRANCISCO and WUXI, China, June 3, 2010 /PRNewswire via COMTEX/ --Suntech Power
Holdings Co., Ltd. (NYSE: STP), the world's largest crystalline silicon
photovoltaic (PV) module manufacturer, today announced financial results for
its first fiscal quarter ended March 31, 2010.
First Quarter 2010 Highlights
-- Total net revenues were $588.0 million in the first quarter of 2010,
representing 0.8% growth sequentially and 86.3% year-over-year
-- Total PV shipments increased 11% sequentially and 182% year-over-year
-- Gross profit margin for the core wafer to module business was 22.1% in
the first quarter of 2010
-- Consolidated gross profit margin was 19.5% in the first quarter of 2010
-- Net income attributable to holders of ordinary shares was $20.7 million,
or $0.11 per diluted American Depository Share (ADS). Each ADS
represents one ordinary share
-- Suntech increases 2010 annual shipment target from 1.25GW to 1.3GW,
which represents an 85% increase above 2009 total shipments
-- Suntech achieved 1.2GW of PV cell and module production capacity at the
end of the first quarter of 2010
"We are pleased to announce 11% sequential growth in shipments for the
first quarter of 2010," said Dr. Zhengrong Shi, Suntech's Chairman and CEO.
"To meet strong global demand for Suntech's premium solar products, which we
expect will continue through the rest of 2010, we maximized the utilization of
our facilities and added an incremental 100MW of PV cell and module capacity
during the quarter. We also maintained our focus on enhancing our regional
service teams to support our growth.
"We are pleased about the solar growth trends that we are seeing across
all geographies. Europe's commitment to achieving 20% renewable energy
generation by 2020 is proving to be the foundation for long-term stable growth.
Our North American dealer network and utility initiatives should enable us to
triple our sales to that region in 2010. And, we are continuing to build our
presence in emerging markets. In fact, Asia, Africa and the Middle East
represented close to 21% of our sales in the first quarter, and we continued
to diversify our geographic sales mix globally. Clear customer recognition of
Suntech's superior track record and highly bankable products is a key driver
of our demand in all of these markets.
"As the leading producer of crystalline silicon solar panels, we are proud
to have reached another important milestone with the shipment of our 10
millionth solar panel during the first quarter. To date, the cumulative solar
energy generated from Suntech panels alone is enough to provide clean and
renewable power for around one million households. This is only the beginning
for Suntech and for widespread solar adoption. Suntech remains strongly
committed to investing in the technology, capacity and global service platform
that will offer even greater access to nature's most abundant energy
Recent Business Highlights
-- The 10 millionth solar panel produced by Suntech was delivered during
the first quarter of 2010. Since inception, Suntech has delivered over
2.2GW of solar products to over 1,400 customers in more than 80
countries. Cumulatively these panels generate enough power for around
-- The Finnow Tower 24.5MW project was recently connected to the grid on a
former military airbase in Germany by Solarhybrid using 90,000 Suntech
270 watt modules. This is one of the five largest PV projects in
-- Suntech received official certification under the UK Microgeneration
Certification Scheme (MCS) for its most popular models, a pre-requisite
for selling solar panels in the UK market. The certification will
enable customers and value-added resellers in the UK to utilize
Suntech's solar panels for reliable electricity generation.
-- According to data published by the California Solar Initiative, Suntech
has consistently increased market share in California's solar market
from 5% in 2008, to 13% in 2009 and 18% so far in 2010. California's
market accounted for approximately 45% of solar sales in North America
-- Suntech has decided to delay expansion of thin film manufacturing
capacity in Shanghai and has designated the Shanghai manufacturing
facility as a new site for expansion of Suntech's high performance
crystalline silicon PV cell and module manufacturing capacity. Suntech
plans to add 1GW of manufacturing capacity in Shanghai within the next
-- Suntech's high performance Pluto technology is currently achieving an
average of over 19% conversion efficiency on mono-crystalline PV cells.
Suntech is currently producing and shipping approximately 4MW of IEC
certified Pluto modules per month.
-- The Victoria-Suntech Advanced Solar Facility was recently launched in
collaboration with the Swinburne University of Technology. The facility
has been partially funded by an AUD3 million grant under the Victorian
Science Agenda Investment Fund and will provide a platform to develop
super high efficiency solar cells based on nanoplasmonic technology.
-- Suntech initiated a research project with the University of New South
Wales and Silex Solar to improve conversion efficiency of crystalline
silicon solar cells. The three-year collaborative research project was
awarded an AUD5 million grant from the Australian Solar Institute.
-- In the first quarter of 2010, Suntech repurchased an aggregate of
$221.2 million principal amount of its 0.25% Convertible Senior Notes
due 2012 for a total consideration of $221.2 million.
First Quarter 2010 Results
Total net revenues for the first quarter of 2010 were $588.0 million, a
slight increase of 0.8% from $583.6 million in the fourth quarter of 2009 and
an increase of 86.3% from $315.7 million in the first quarter of 2009.
For the first quarter of 2010, consolidated gross profit was $114.5
million and gross margin was 19.5% compared to consolidated gross profit of
$138.7 million and gross margin of 23.8% in the fourth quarter of 2009. The
sequential gross margin decline was primarily due to a lower average sales
price as a result of the substantial depreciation of the Euro versus the U.S.
Operating expenses for the first quarter of 2010 decreased to $51.0
million compared to $51.7 million in the fourth quarter of 2009.
Income from operations was $63.5 million for the first quarter of 2010
compared to $87.0 million in the fourth quarter of 2009.
Net interest expense declined to $22.6 million in the first quarter of
2010 compared to net interest expense of $24.2 million in the fourth quarter
of 2009. Net interest expense in the first quarter of 2010 included $8.6
million in non-cash expenses of which $7.3 million was related to the adoption
of FASB Codification 470-20-65, Accounting for Convertible Debt Instruments
that May be Settled in Cash Upon Conversion. This compares to $12.7 million in
non-cash net interest expense in the fourth quarter of 2009. The decrease in
interest expenses was primarily due to the repurchase of the significant
majority of the outstanding 0.25% Convertible Senior Notes due 2012, which had
a put option in February 2010.
Foreign currency exchange loss was $24.5 million in the first quarter of
2010 compared to $13.2 million in the fourth quarter of 2009. The foreign
currency loss in the first quarter was primarily related to the substantial
depreciation of the Euro versus the US Dollar.
Net other income was $2.8 million in the first quarter of 2010, compared
with a net other expense of $3.6 million in the fourth quarter of 2009. The
net other income in the first quarter of 2010 was mainly due to gains from
hedging activities. Foreign exchange loss net of hedging gains was
approximately $21.9 million in the first quarter of 2010.
Net income attributable to holders of ordinary shares was $20.7 million,
or $0.11 per diluted ADS for the first quarter of 2010, compared to net income
of $44.0 million, or $0.24 per diluted ADS, for the fourth quarter of 2009.
In the first quarter of 2010, the major non-cash related expenses were
share-based compensation charges of $3.0 million; $8.6 million of non-cash
interest expenses, as mentioned above; and depreciation and amortization
expenses of $18.7 million.
In the first quarter of 2010, capital expenditures, which were primarily
for the addition of new production equipment, totaled $72.4 million.
Cash and cash equivalents decreased to $677.2 million as of March 31, 2010,
from $833.2 million as of December 31, 2009. The decrease in cash and cash
equivalents was primarily due to the additional investment made to GSF,
repurchase of the 0.25% Convertible Senior Notes due 2012, and sequential
increases in restricted cash, accounts receivable and inventory.
Accounts receivable totaled $467.7 million as of March 31, 2010, compared
with $384.4 million as of December 31, 2009. The increase was mainly due to a
higher shipment level in the last month of the quarter. Days sales outstanding
were 72 days in the first quarter of 2010, compared to 60 days in the fourth
quarter of 2009.
Accounts receivable due from investee companies of GSF was $104.0 million
as of March 31, 2010, compared with $110.2 million as of December 31, 2009.
The sequential decrease in the related accounts receivable was due to the
depreciation of the Euro versus the USD.
Inventory was $314.1 million as of March 31, 2010, compared with $280.1
million as of December 31, 2009. The increase in inventory was in line with
the growth of production and shipments.
Accounts payable totaled $384.3 million as of March 31, 2010, compared
with $264.2 million as of December 31, 2009. The increase in accounts payable
was primarily due to extended credit terms from suppliers.
In the second quarter of 2010, Suntech expects single digit percentage
growth in shipments sequentially. Consolidated gross margin in the second
quarter of 2010 is expected to be in the high teens, which is based on an
assumed exchange rate of 1.23USD to the Euro.
Due to strong demand, Suntech has increased its 2010 shipment target from
1.25GW to more than 1.3GW, which is 85% higher than 2009 shipments.
Suntech is on track to expand PV cell production capacity to 1.4GW by the
end of the second quarter 2010 of which 450MW will be Pluto-enabled. To
achieve 1.4GW capacity, Suntech expects capital expenditures of approximately
First Quarter 2010 Conference Call Information
Suntech management will host a conference call today, Thursday, June 3,
2010 at 8:00a.m. U.S. Eastern Time (which corresponds to 8:00p.m.Beijing/Hong
Kong time and 12:00p.m. Greenwich Mean Time on June 3, 2010) to discuss the
To access the conference call, please dial +1-617-597-5392 (for U.S.
callers/ international callers) or +852-3002-1672 (for HK callers) and ask to
be connected to the Suntech earnings conference call. A live and archived
webcast of the conference call will be available on Suntech's website at
http://www.suntech-power.com under Investor Center: Financial Events.
A telephonic replay of the conference call will be available until June 13,
2010 by dialing +1-617-801-6888 (passcode: 76039171).
Suntech Power Holdings Co., Ltd. (NYSE: STP) produces industry-leading
solar products for residential, commercial, industrial, and utility
applications. With regional headquarters in China, Switzerland, and the United
States, and gigawatt-scale manufacturing worldwide, Suntech has delivered more
than 10,000,000 photovoltaic panels to over 1,400 customers in more than 80
countries. Suntech's pioneering R&D creates customer-centric innovations that
are driving solar to grid parity against fossil fuels. Suntech's mission is to
provide everyone with reliable access to nature's cleanest and most abundant
For more information about Suntech's people and products visit
Safe Harbor Statement
This press release contains forward-looking statements. These statements
constitute "forward-looking" statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and as defined in the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar statements,
and includes the ability to increase PV cell production capacity to 1.4GW by
mid-2010; expected Q2 2010 shipments and gross margin; full year 2010 shipment
expectations; and 2010 capacity and capital expenditures; the ability of
Europe to achieve its renewable energy generation commitment by 2020; expected
demand in 2010; the amount of manufacturing capacity to be installed in
Shanghai within 3 years; the ability to develop nanoplasmonic solar cell
technology; and the ability of the UNSW and Silex Solar project to increase
conversion efficiency. Such statements involve certain risks and uncertainties
that could cause actual results to differ materially from those in the
forward-looking statements. Further information regarding these and other
risks is included in Suntech's filings with the U.S. Securities and Exchange
Commission, including its annual report on Form 20-F. Suntech does not
undertake any obligation to update any forward-looking statement as a result
of new information, future events or otherwise, except as required under
Note: The quarterly consolidated income statements are unaudited. The
condensed consolidated balance sheets are derived from Suntech's
unaudited consolidated financial statements.
SUNTECH POWER HOLDINGS CO., LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
As of As of
Mar 31, Dec 31,
Cash and cash equivalents 677,159 833,158
Restricted cash 162,762 124,877
Inventories 314,119 280,054
Accounts receivable 467,677 384,416
-----Investee companies of GSF 103,970 110,231
-----from others 363,707 274,185
Value-added tax recoverable 58,948 41,219
Advances to suppliers 50,195 48,820
Short-term investments -- 200,817
Other current assets 268,391 242,625
Total current assets 1,999,251 2,155,986
Property, plant and equipment, net 816,558 777,580
Intangible assets, net 162,692 166,687
Goodwill 84,209 86,062
Investments in affiliates 330,958 251,347
Long-term prepayments 187,399 188,085
Long-term loan to suppliers 54,340 54,667
Amount due from related parties 180,515 193,577
Other non-current assets 107,378 109,663
TOTAL ASSETS 3,923,300 3,983,654
LIABILITIES AND EQUITY
Short-term borrowings, including
current portion of long-term bank
borrowings 835,541 800,390
Accounts payable 384,316 264,235
Convertible notes-current 4,218 223,982
Other current liabilities 213,263 229,473
Total current liabilities 1,437,338 1,518,080
Long-term bank borrowings 132,425 138,021
Convertible notes-non-current 524,242 516,912
Accrued warranty costs 60,116 55,152
Other long-term liabilities 138,724 142,730
Total liabilities 2,292,845 2,370,895
Total Suntech Power Holding Co. Ltd.
Equity 1,616,677 1,598,049
Noncontrolling interest 13,778 14,710
Total equity 1,630,455 1,612,759
TOTAL LIABILITIES AND EQUITY 3,923,300 3,983,654
SUNTECH POWER HOLDINGS CO., LTD.
CONSOLIDATED INCOME STATEMENT
(In $'000, except share, per share, and per ADS data)
Three months Three months Three months
ended ended ended
Mar 31, Dec 31, Mar 31,
2009 2009 2010
Total net revenues 315,656 583,619 588,034
- Investee companies of GSF 100,547 -- --
- Others 215,109 583,619 588,034
Total cost of revenues 259,369 444,916 473,491
Gross profit 56,287 138,703 114,543
Selling expenses 11,401 20,493 19,984
General and administrative expenses 18,820 18,164 21,477
Research and development expenses 4,922 13,023 9,561
Total operating expenses 35,143 51,680 51,022
Income from operations 21,144 87,023 63,521
Interest expense -26,743 -25,667 -23,436
Interest income 5,098 1,449 851
Foreign exchange loss -6,191 -13,198 -24,542
Other income (expense), net 12,567 -3,646 2,776
Income before income taxes 5,875 45,961 19,170
Tax provision (expense), net 78 -2,643 -3,150
Net income after taxes before
noncontrolling interest and equity
in earnings of affiliates 5,953 43,318 16,020
Added Equity in (loss) earnings of
affiliates, net of taxes -3,874 452 4,622
Net income 2,079 43,770 20,642
Add: Net (loss) income attributable to
the noncontrolling interest -292 253 63
Net Income attributable to ordinary
shareholders of Suntech Power
Holdings Co., Ltd. 1,787 44,023 20,705
Net income per share and per ADS:
- Basic 0.01 0.25 0.12
- Diluted 0.01 0.24 0.11
Shares and ADSs used in
- Basic 155,881,265 179,047,395 179,298,622
- Diluted 156,794,603 182,322,610 182,268,491
Each ADS represents one ordinary share
For further information, please contact:
Investor Relations Director
In the United States:
Executive Vice President
The Piacente Group, Inc. (Investor Relations Counsel, Suntech)
SOURCE Suntech Power Holdings Co., Ltd.