LDK Solar Reports Sales Of $420M For Fourth Quarter 2011
Fourth Quarter Highlights:
"¢ Net sales of $420.2 million;
"¢ Shipped 197.1 MW of wafers, 255.5 MW of cells and modules
"¢ Produced approximately 2,317.8 MT of polysilicon
"¢ Produced approximately 149.6 MW of cells
"¢ Net sales for the fourth quarter of fiscal 2011 were $420.2 M, verus $920.9 M for same quarter 2010.
"¢ Gross loss for the fourth quarter of fiscal 2011 was $275.2 M, compared to gross loss of $17.0 m in the third quarter of fiscal 2011, and gross profit of $251.4 M for the fourth quarter of fiscal 2010.
"¢ Gross margin for the fourth quarter of fiscal 2011 was negative 65.5%, compared to negative 3.6% in the third quarter of fiscal 2011, and positive 27.3% in the fourth quarter of fiscal 2010.
During the preparation of its fourth quarter 2011 financial results, LDK Solar's management determined that an inventory write-down and provision for firm purchase commitment of $232.6 million was required as a result of the significant drop in market price for polysilicon, wafers and modules during the fourth quarter. As a result, gross margin and results from operations were negatively impacted in the fourth quarter of fiscal 2011.
Loss from operations for the fourth quarter of fiscal 2011 was $531.4 million, compared to loss from operations of $77.1 million for the third quarter of fiscal 2011, and income from operations of $203.8 million for the fourth quarter of fiscal 2010. Apart from the inventory write-down and provision for firm purchase commitment, LDK Solar's management determined that a provision for doubtful receivables and prepayments of $179.2 million was required in view of deteriorating solar market which negatively affected our customers and suppliers.
Operating margin for the fourth quarter of fiscal 2011 was negative 126.5% compared to negative 16.3% in the third quarter of fiscal 2011, and positive 22.1% in the fourth quarter of fiscal 2010.
Income tax benefit for the fourth quarter of fiscal 2011 was $45.1 million, compared to income tax benefit of $1.7 million in the third quarter of fiscal 2011 and income tax expense of $40.5 million in the fourth quarter of fiscal 2010.
Net loss attributable to LDK Solar's shareholders for the fourth quarter of fiscal 2011 was $588.7 million, or a loss of $4.63 per diluted ADS, compared to a net loss of $114.5 million, or a loss of $0.87 per diluted ADS for the third quarter of fiscal 2011 and net income of $145.2 million, or $1.09 per diluted ADS for the fourth quarter of fiscal 2010. The number of shares for calculating diluted ADS was approximately 127.2 million for the fourth quarter of fiscal 2011.
LDK Solar ended the fourth quarter of fiscal 2011 with $244.1 million in cash and cash equivalents and $565.1 million in short-term pledged bank deposits.
"The solar industry experienced a tremendous supply and demand imbalance throughout the value chain during the fourth quarter. Our results reflected the negative effects of this dislocation in the PV market," stated Xiaofeng Peng, Chairman and CEO of LDK Solar. "Weak market demand and rapidly declining average selling prices reduced our revenue and adversely impacted our margins in the quarter.
"In 2012, we expect that excess capacity and further policy uncertainties in Europe and the U.S. will result in continued intense competition within the solar industry. As such, we remain focused on improving our cost structure by driving down production costs and closely managing our operating expenses. PV applications are increasing globally with improved affordability for solar electricity. We continue to believe that the considerable opportunities to meet global energy needs with solar power will drive long-term market growth," concluded Mr. Peng.
