News Article
JinkoSolar Q3 Results See Product Shipments Up Year On Year
JinkoSolar Holding Co., Ltd. a vertically integrated solar power product manufacturer with low-cost operations based in China, has announced its unaudited financial results for the third quarter ended September 30, 2011.
Third Quarter 2011 Highlights
- Total solar product shipments were 257.7 megawatts ("MW"), compared with 254.1 MW in the second quarter of 2011 and 134.8 MW in the third quarter of 2010, representing an increase of 1.4% sequentially and 91.2% year-over-year.
- Total revenues were RMB1.8 billion (US$279.2 million), an increase of 23.8% year-over-year, and a decrease of 21.4% sequentially.
- Gross margin was 3.7%, compared with 25.4% in the second quarter of 2011 and 33.5% in the third quarter of 2010. The negative impact of an RMB170.9 million (US$26.8 million) inventory provision to third quarter gross margin was 9.6%.
- In-house gross margin(1) was 18.4%, compared with 30.5% in the second quarter of 2011 and 38.6% in the third quarter of 2010.
- Loss from operations was RMB197.3 million (US$30.9 million), compared with income from operations of RMB409.9 million in the second quarter of 2011 and income from operations of RMB379.3 million in the third quarter of 2010.
- Net income was RMB68.1 million (US$10.7 million), a decrease of 71.1% sequentially and a decrease of 73.8% year-over-year.
- Diluted loss per share was RMB2.97 (US$0.47), compared with diluted earnings per share of RMB2.23 in the second quarter of 2011 and diluted earnings per share of RMB2.93 in the third quarter of 2010.
- Diluted loss per American depositary share ("ADS") was RMB11.88 (US$1.86), compared with diluted earnings per ADS of RMB8.91 in the second quarter of 2011 and diluted earnings per ADS of RMB11.70 in the third quarter of 2010. Each ADS represents four ordinary shares.
(1) JinkoSolar defines "in-house gross margin" as the gross margin of PV modules produced using the Company's in-house produced silicon wafers and solar cells.
"The third quarter of 2011 was clearly a challenging period for both our company and the industry as a whole as the uncertain economic environment throughout Europe pressured demand and the typical seasonal upturn in Germany failed to materialize," commented Mr. Kangping Chen, JinkoSolar's chief executive officer. "During the quarter, we came in line with the high-end of our revised guidance for total module shipments and revenue, but significant pricing pressure in the market drove down average selling prices (ASPs) of solar products faster than we anticipated while the polysilicon prices did not fall as rapidly. Unfortunately this mismatch had a significant impact on our margins and was the primary reason behind a non-cash inventory provision. In the face of such extremely challenging market conditions, we continued to take advantage of our vertically integrated business model to find new efficiencies in our production processes and squeeze out incremental improvements in our cost structure. As a result, we were able to keep our in-house gross margin at high teens while our overall gross margin stayed positive.
"Total product shipments hit a new record of 257.7 megawatts, which would not have been possible were it not for the strong relationships and support we have maintained among our customers around the world. Despite the situation in Europe, we intend to further grow our market share in the region with our mature sales team and solid market presence. We will also continue to build our teams in the US and China, further expand our geographic footprint by establishing an on-the-ground presence in Canada and Australia, and explore other emerging solar markets such as India and South Africa.
"As we look forward, solar demand over the long term remains promising, but growth rates are clearly going to moderate in the near-term. While we expect some amount of rationalization in terms of module supply around the world before the industry emerges from its current lows, we believe we are particularly well positioned to lead the industry in recovery given our strong balance sheet, competitive cost structure, efficient assets, and wide-reaching global presence."
