JA Solar Announces Fourth Quarter and Fiscal Year 2014 Results

Zhabei, CHINA


SHANGHAI, China, March 12, 2015 (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 fourth quarter and fiscal year ended December 31, 2014.

Fourth Quarter 2014 Highlights

- Total shipments were 952.7 megawatts ("MW"), increases of +43.2% y/y and +21.3% sequentially

Shipments of modules and module tolling were 879.6 MW, increases of +142.1% y/y and +26.8% sequentially

Shipments of cells and cell tolling were 73.1 MW, decreases of 75.8% y/y and 20.5% sequentially

Net revenue was RMB 3.6 billion ($576.4 million), an increase of +65.3% y/y and +18.4% sequentially

Gross margin was 15.5%, remained unchanged y/y and an increase of 50 basis points sequentially

Operating profit was RMB 222.4 million ($35.8 million), compared to RMB 58.9 million ($9.5 million) in the fourth quarter of 2013, and RMB 189.6 million ($30.6 million) in the third quarter of 2014

Net income was RMB 166.1 million ($26.8 million), compared to RMB 139.5 million ($22.5 million) in the fourth quarter of 2013, and RMB 155.4 million ($25.0 million) in the third quarter of 2014

-  Earnings per diluted ADS were RMB 2.55 ($0.41), compared to RMB 1.92 ($0.31) in the fourth quarter of 2013, and remained unchanged from the third quarter of 2014

-  Cash and cash equivalents were RMB 2.2 billion ($347.3 million), an increase of RMB 439.7million ($70.9 million) during the quarter

-  Operating cash flow was positive RMB 158.5 million ($25.5 million), compared to negative RMB 184.1 million ($30.0 million) in the third quarter of 2014

-  Non-GAAP earnings1 per diluted ADS were RMB 1.74 ($0.28), compared to RMB 0.94 ($0.15) in the fourth quarter of 2013, and RMB 1.30 ($0.21) in the third quarter of 2014

Fiscal Year 2014 Highlights

-  Shipments grew to approximately 3.1 gigawatts ("GW"), consisting of 2,406.8 MW of modules and module tolling and 651.1 MW of cells and cell tolling, an increase of 47.6% from 2.1 GW in fiscal year 2013

-  Net revenue was RMB 11.3 billion ($1.8 billion), compared to net revenue of RMB 7.2 billion ($1.2 billion) in fiscal year 2013

-  Gross margin was 15.6%, compared to 10.6% in fiscal year 2013

-  Operating profit was RMB 662.5 million ($106.8 million), compared to an operating loss of RMB 91.3  million ($14.7 million) in fiscal year 2013

-  Net income was RMB 446.7 million ($72.0 million), compared to a net loss of RMB 426.5 million ($68.7 million) in fiscal year 2013

-  Earnings per diluted ADS was RMB 6.88 ($1.11), compared to a loss per diluted ADS of RMB 11.76 ($1.89) in fiscal year 2013

-  Cash and cash equivalents at the end of the fiscal year were RMB 2.2 billion ($347.3 million), compared with RMB 2.1 billion ($341.6 million) at the end of fiscal year 2013

-  Operating cash flow was positive RMB 526.2 million ($84.8 million), compared to operating cash flow of positive RMB 1.5 billion ($236.1 million) in fiscal year 2013

-  Non-GAAP net income attributable to the Company's ordinary shareholders was RMB 349.8 million ($56.4 million), compared to a non-GAAP net loss attributable to the Company's ordinary shareholders of RMB 378.2 million ($61.0 million) in fiscal year 2013

-  Non-GAAP earnings per diluted ADS in fiscal year 2014 was RMB 5.45 ($0.88), compared to a non-GAAP loss per diluted ADS of RMB 9.39 ($1.51) in fiscal year 2013

Mr. Baofang Jin, chairman and CEO of JA Solar, commented, "Our results in Q4 confirm the visibility we had coming into the quarter. Demand in the China market was as strong as expected, as developers and utilities rushed to meet aggressive government-directed goals for the year. We started the quarter with all of our capacity booked, and demonstrated excellent manufacturing execution to fill orders, resulting in a shipment growth of 43% year-over-year and 21% sequentially. We executed at the margin level too, with product and geographic mix drive sequentially higher gross margin. Filling capacity as we grow enabled us to show steady bottom line improvement. We grew non-GAAP earnings per ADS by 34% sequentially and 85% year over year.

"These strong results capped a year of achievement for JA, in which we solidified our position as a leader within the top tier of solar equipment producers. We expect our revenue growth rate of 57% to be among the highest in the industry. Our strategic decision to shift our product mix to more profitable modules and better geographies paid off, with gross profit more than doubling as our gross margin expanded by 500 basis points. We continued to invest heavily in R&D, increasing this expense by 58%, but held other operating expenses under control, resulting in solid operating and net margins. Our intention in 2015 is to sustain this track record of rapid growth and high profitability.

"With profitability restored and our intended mix shift to modules complete, our focus now turns to important initiatives that will drive the next leg of growth. In particular, we are enthusiastic about expanding sales into new, underpenetrated geographies such as North America, South America, and India. We expect to sustain our technology leadership with record new efficiencies in our Recium and Percium cells. And we intend to accelerate our downstream project development segment by more than doubling our planned installations this year.

"We are optimistic and confident about the future for JA Solar. We have established our industry leadership in many ways, whether it be the talent and hard work of our employees, or the strength of our customer relationships. We expect our leadership position to drive outstanding results in the year ahead, creating success for our customers, shareholders, and employees."

Fourth Quarter 2014 Financial Results

All shipment and financial figures refer to the quarter ended December 31, 2014, unless otherwise specified. All "year over year" or "y/y" comparisons are against the quarter ended December 31, 2013. All "sequential" comparisons are against the quarter ended September 30, 2014.

Total shipments were 952.7 MW, above the high end of the previously announced guidance of 850 to 900 MW. Shipments grew 21.3% sequentially and 43.2% year over year.

Shipment breakdown by product (MW)

  2013Q4 2014Q3 2014Q4 QoQ% YoY%
Modules and module tolling  363.3  693.5  879.6 26.8% 142.1%
Cells and cell tolling  302.2  91.9  73.1 -20.5% -75.8%
Total  665.5  785.4  952.7 21.3% 43.2%

Shipment breakdown by region (percentage)

  2013Q4 2014Q3 2014Q4 QoQ(pp) YoY(pp)
China 53.2% 34.8% 41.0% 6.2 pp -12.2 pp
APAC ex-China 31.7% 46.4% 37.3% -9.1 pp 5.6 pp
Europe 8.5% 9.2% 12.8% 3.6 pp 4.3 pp
Americas 5.9% 4.7% 4.4% -0.3 pp -1.5 pp
Others 0.7% 4.9% 4.5% -0.4 pp 3.8 pp

Net revenue was RMB 3.6 billion ($576.4 million), an increase of 65.3% y/y and 18.4% sequentially. Growth was driven by exceptional strength in China, and also benefited from solid sequential and year over year growth in Europe and North America. Revenue growth exceeded shipment growth as our mix shifted to over 90% modules, which command a higher price point and better margins than cells.

Gross profit of RMB 553.9 million ($89.3 million) increased 65.4% y/y and 21.9% sequentially. Gross margin was 15.5%, which compares to 15.5% in the year-ago quarter, and 15.0% in the third quarter of 2014. The sequential gross margin increase was driven by the continued shift in mix to modules.

Total operating expenses of RMB 331.5 million ($53.4 million) were 9.3% of revenue. This compares to operating expenses of 12.8% of revenue in the year-ago quarter, and 8.8% of revenue in the third quarter of 2014. The sequential increase in operating expense was primarily due to a provision against a prepayment of RMB 63.3 million ($10.2 million) to one of our suppliers.

Operating profit was RMB 222.4 million ($35.8 million), compared to RMB 58.9 million ($9.5 million) in the year-ago quarter, and RMB 189.6 million ($30.6 million) in the third quarter of 2014. Operating margin was 6.2%, compared with 2.7% in the prior year period and 6.3% in the previous quarter.

Interest expense was RMB 61.5 million ($9.9 million), compared to RMB 50.7 million ($8.2 million) in the year-ago quarter, and RMB 56.7 million ($9.1 million) in the third quarter of 2014.

The change in fair value of warrant derivatives was positive RMB 48.7 million ($7.8 million), compared with positive RMB 75.3 million ($12.1 million) in the third quarter of 2014, and positive RMB 87.3 million ($14.1 million) in the year-ago quarter. The warrants were issued on August 16, 2013 in conjunction with the Company's $96 million registered direct offering. The positive change in fair value, which was a non-cash gain, was mainly due to the decrease in the Company's stock price during the quarter.

Earnings per diluted ADS were RMB 2.55 ($0.41), compared to earnings per diluted ADS of RMB 1.92 ($0.31) in the year-ago quarter, and earnings per diluted ADS of RMB 2.55 ($0.41) in the third quarter of 2014.

Operating cash flow was RMB 158.5 million ($25.5 million).

Fiscal Year 2014 Results

Fiscal year 2014 shipments were 3.1 GW, an increase of 47.6% from 2.1 GW in fiscal year 2013.

Shipment breakdown by product (MW)

  2013 2014 YoY%
Modules and module tolling  1,173.7  2,406.8 105.1%
Cells and cell tolling  898.3  651.1 -27.4%
Total  2,072.0  3,057.9 47.6%

Shipment breakdown by region (percentage)

  2013 2014 YoY%
China 43.2% 33.0% -10.2pp
APAC ex-China 33.6% 45.0% 11.4pp
Europe 15.1% 12.6% -2.6pp
Americas 6.4% 5.9% -0.5pp
Others 1.7% 3.5% 1.8pp

Net revenue in fiscal year 2014 was RMB 11.3 billion ($1.8 billion), an increase of 57.3% from RMB 7.2 billion ($1.2 billion) in fiscal year 2013.

Total gross profit in fiscal year 2014 was RMB 1.8 billion ($283.1 million), or 15.6% of net revenue, compared with RMB 762.3 million ($122.9 million), or 10.6% of net revenue, in fiscal year 2013.

Operating profit in fiscal year 2014 was RMB 662.5 million ($106.8 million), compared with operating loss of RMB 91.3 million ($14.7 million) in fiscal year 2013. In fiscal year 2014, net earnings per diluted ADS was RMB 6.88 ($1.11), compared with net loss per diluted ADS of RMB 11.76 ($1.89) in fiscal year 2013.

In fiscal year 2014, the Company generated positive operating cash flow of RMB 526.2 million ($84.8 million), or RMB 10.84 ($1.75) per diluted ADS. Cash flow results also reflect the impact of the reclassification of RMB 437.6 million ($70.5 million) from operating cash outflow to investing cash outflow in Q4, due to the Company's decision to retain and operate certain projects that were originally intended to be sold.

Liquidity

As of December 31, 2014, the Company had cash and cash equivalents of RMB 2.2 billion ($347.3 million), and total working capital of RMB 2.0 billion ($325.6 million). Total short-term borrowings were RMB 2.3 billion ($366.7 million). Total long-term borrowings were RMB 1.92 billion ($310.2 million), of which RMB 22.0 million ($3.5 million) were due in one year.

Subsequent Events

On January 25, 2015, JA connected to the national grid its 100 MW PV power plant, consisting of two phases of 50MW each, in the city of Dunhuang, Gansu Province, China. The Company funded the project with long-term project financing from the Industrial and Commercial Bank of China. As of the date of this press release, the company received RMB 300 million ($48.4 million) loan for Phase I and has secured an additional RMB 300 million ($48.4 million) for Phase II. The project is now generating revenue from electricity sales.

Business Outlook

For the first quarter of 2015, the Company expects total cell and module shipments to be in the range of 680 MW to 750 MW. Full year 2015 shipments are expected to be in the range of 3.6 GW to 4.0 GW, including 200 MW to 300 MW of modules shipments to the Company's downstream projects.

Investor Conference Call / Webcast Details

JA Solar will hold a conference call on Thursday, March 12, 2015, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing/Hong Kong Time), to discuss the Company's fourth quarter and full year 2014 results.

Dial-in details for the live conference call are as follows:

International: +65-6723-9381
U.S.: +1-866-519-4004
Hong Kong: +852-3018-6771
Passcode: JA Solar 

A live webcast of the conference call will be available on the Company's website at http://www.jasolar.com.

A replay of the call will be available beginning two hours after the live call.

The dial-in details for the replay are as follows:

International: + 61-2-8199-0299 
United States: +1-855-452-5696 
Passcode: 71760156

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 December 31, 2014, which was RMB 6.2046 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 December 31, 2014, 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 3.1 GW of solar power products in 2014. JA Solar is headquartered in Shanghai, China, and maintains production facilities in Shanghai, as well as Hebei, Jiangsu and Anhui provinces.

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

1 JA Solar adjusts net income attributable to the Company's ordinary shareholders to exclude (1) changes in fair value of certain warrants granted to certain investors in a registered direct offering (the "Offering") closed on August 16, 2013, and (2) fair value of such warrants exceeding net proceeds from the Offering.

JA Solar Holdings Co., Ltd.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
  For three months ended
  Dec. 31, 2013 Sep. 30, 2014 Dec. 31, 2014 Dec. 31, 2014
  RMB'000 RMB'000 RMB'000 USD'000
         
Net revenues  2,163,044  3,021,304  3,576,308  576,396
Cost of sales (1,828,087) (2,567,126) (3,022,444)  (487,130)
Gross profit  334,957 454,178  553,864  89,266
Selling, general and administrative expenses (245,496) (225,456) (292,710) (47,176)
Research and development expenses  (30,587)  (39,170)  (38,744) (6,244)
Total operating expenses  (276,083)  (264,626)  (331,454)  (53,420)
Income from operations  58,874  189,552  222,410  35,846
Interest expense  (50,694)  (56,652)  (61,496)  (9,911)
Change in fair value of warrant derivatives  87,259  75,332  48,664  7,843
Other income/(loss), net  4,073  (34,068)  (13,600)  (2,192)
Income before income taxes  99,512  174,164  195,978  31,586
Income tax benefit/(expense)  39,997  (18,749)  (29,853)  (4,811)
Net income  139,509  155,415  166,125  26,775
Less: (loss)/income attributable to noncontrolling interest  (2,875)  2,175  13,043  2,102
Net income attributable to JA Solar Holdings  142,384  153,240  153,082  24,673
         
Net income per share attributable to ordinary shareholders:        
Basic (Note)  0.49  0.51  0.51  0.08
Diluted  0.38  0.51  0.51  0.08
         
Weighted average number of shares outstanding:        
Basic  216,365,357 248,618,157 248,660,195 248,660,195
Diluted 218,404,795 248,984,677 248,885,240 248,885,240
         
Comprehensive income        
Net income 139,509 155,415 166,125 26,775
Foreign currency translation adjustments, net of tax 1,849 5,045 3,119 503
Other comprehensive income 1,849 5,045 3,119 503
Comprehensive income 141,358 160,460 169,244 27,278
Fair value of warrants in excess of net proceeds of equity offering 0 0 0 0
(Loss)/income attributable to noncontrolling interest (2,875) 2,175 13,043 2,102
Comprehensive income attributable to JA Solar Holdings 144,233 158,285 156,201 25,176
         
NON-GAAP RECONCILIATION        
         
GAAP net income attributable to JA Solar Holdings 142,384 153,240 153,082 24,673
Change in fair value of warrant derivatives (87,259) (75,332) (48,664) (7,843)
Non-GAAP net income attributable to JA Solar Holdings 55,125 77,908 104,418 16,830
         
Non-GAAP net income per share attributable to ordinary shareholders:        
Basic 0.19 0.26 0.35 0.06
Diluted 0.19 0.26 0.35 0.06
         
Non-GAAP weighted average number of shares outstanding:        
Basic 216,365,357 248,618,157 248,660,195 248,660,195
Diluted 218,404,795 248,984,677 248,885,240 248,885,240
         
Note: JA Solar excludes net income attributable to the participating warrant holder of RMB 26.0 million (US$4.2 million) from the numerator of basic EPS in the fourth quarter 2014.
         
JA Solar Holdings Co., Ltd.
Condensed Consolidated Statements of Operations
(Unaudited)
  For twelve months ended
  Dec. 31, 2013 Dec. 31, 2014 Dec. 31, 2014
  RMB'000 RMB'000 USD'000
       
Net revenues 7,182,789 11,295,523 1,820,508
Cost of sales (6,420,500) (9,539,028) (1,537,412)
Gross profit 762,289 1,756,495 283,096
Selling, general and administrative expenses (765,236) (954,307) (153,806)
Research and development expenses (88,306) (139,683) (22,513)
Total operating expenses (853,542) (1,093,990) (176,319)
(Loss)/income from operations (91,253) 662,505 106,777
Interest expense (285,618) (229,665) (37,015)
Change in fair value of warrant derivatives (51,074) 74,015 11,929
Other (loss)/income, net (13,574) 13,185 2,125
(Loss)/income before income taxes (441,519) 520,040 83,816
Income tax benefit/(expenses) 15,027 (73,390) (11,828)
Net (loss)/income (426,492) 446,650 71,988
Fair value of warrants in excess of net proceeds of equity offering (44,396) 0 0
Less: income attributable to noncontrolling interest 2,788 22,879 3,687
Net (loss)/income attributable to JA Solar Holdings (473,676) 423,771 68,301
       
Net (loss)/income per share attributable to ordinary shareholders:      
Basic (2.35) 1.43 0.23
Diluted (2.35) 1.38 0.22
       
Weighted average number of shares outstanding:      
Basic  201,317,884  242,192,859  242,192,859
Diluted  201,317,884  242,863,084  242,863,084
       
Comprehensive loss      
Net (loss)/income (426,492) 446,650 71,988
Foreign currency translation adjustments, net of tax 9,507 4,597 741
Other comprehensive income 9,507 4,597 741
Comprehensive (loss)/income (416,985) 451,247 72,729
Fair value of warrants in excess of net proceeds of equity offering (44,396) 0 0
Income attributable to noncontrolling interest 2,788 22,879 3,687
Comprehensive (loss)/income attributable to JA Solar Holdings (464,169) 428,368 69,042
       
NON-GAAP RECONCILIATION      
       
GAAP net (loss)/income attributable to JA Solar Holdings (473,676) 423,771 68,301
Change in fair value of warrant derivatives 51,074 (74,015) (11,929)
Fair value of warrants in excess of net proceeds of equity offering 44,396 0 0
Non-GAAP net (loss)/income attributable to JA Solar Holdings (378,206) 349,756 56,372
       
Non-GAAP net (loss)/income per share attributable to ordinary shareholders:      
Basic (1.88) 1.14 0.18
Diluted (1.88) 1.09 0.18
       
Non-GAAP weighted average number of shares outstanding:      
Basic 201,317,884 242,192,859 242,192,859
Diluted 201,317,884 242,863,084 242,863,084
       
JA Solar Holdings Co., Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
 
  Dec. 31, Dec. 31,
  2013 2014 2014
  RMB'000 RMB'000 USD'000
       
ASSETS      
Current assets:       
Cash and cash equivalents  2,119,740  2,155,009  347,324
Restricted cash  588,413  833,084  134,269
Accounts receivable   1,044,111  2,461,741  396,761
Inventories  1,347,094  1,886,268  304,011
Advances to suppliers  401,472  337,595  54,410
Other current assets  851,203  926,806  149,374
Total current assets  6,352,033  8,600,503  1,386,149
Property and equipment, net  4,158,108  4,166,747  671,558
Project asset  47,746  651,494  105,002
Advances to suppliers  753,913  451,704  72,801
Long-term investment  48,802  13,524  2,180
Other long term assets  521,092  599,806  96,671
Total assets  11,881,694  14,483,778  2,334,361
LIABILITIES AND SHAREHOLDERS' EQUITY      
Current liabilities:      
Short-term borrowings   1,042,432  2,275,533  366,749
Accounts payable   1,882,631  2,770,299  446,491
Advances from customers  202,723  243,959  39,319
Current portion of long term borrowings  936,163  22,000  3,546
Derivative liabilities-warrants  31,106  105,785  17,049
Accrued and other liabilities   945,829  1,162,510  187,364
Total current liabilities  5,040,884  6,580,086  1,060,518
Long-term borrowings   1,554,000  1,902,400  306,611
Derivative liabilities-warrants  154,259  --   -- 
Other long term liabilities  428,472  534,424  86,133
Total liabilities  7,177,615  9,016,910  1,453,262
Total JA Solar Holdings shareholders' equity  4,620,262  5,360,172  863,903
Noncontrolling interest  83,817  106,696  17,196
Total shareholders' equity  4,704,079  5,466,868  881,099
Total liabilities and shareholders' equity  11,881,694  14,483,778  2,334,361


        

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