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Hanwha SolarOne Reports Fourth Quarter 2012 and Full Year 2012 Results



    Hanwha SolarOne Reports Fourth Quarter 2012 and Full Year 2012 Results

PR Newswire

SHANGHAI, March 18, 2012

SHANGHAI, March 18, 2012 /PRNewswire/ -- Hanwha SolarOne Co., Ltd. ("SolarOne"
or the "Company") (Nasdaq: HSOL), a vertically integrated manufacturer of
silicon ingots, wafers and photovoltaic ("PV") cells and modules in China,
today reported its unaudited financial results for the quarter ended December
31, 2012.  The Company will host a conference call to discuss the results at
8:00 am Eastern Time (8:00 pm Shanghai Time) on March 18, 2012.  A slide
presentation with details of the results will also be available on the
Company's website prior to the call.

FOURTH QUARTER 2012 HIGHLIGHTS

  o Total net revenues were RMB836.7 million (US$134.3 million), a decrease of
    13.4% from 3Q12, and a decrease of 14.5% from 4Q11.
  o PV module shipments, including module processing services, were 198.9 MW,
    a decrease of 17.0% from 239.5 MW in 3Q12, and an increase of 5.2% from
    189.1 MW in 4Q11.
  o Average selling price ("ASP"), excluding module processing services,
    decreased to RMB3.75 per watt (US$0.60) from RMB4.22 per watt in 3Q12, and
    decreased from RMB6.29 per watt in 4Q11.
  o The Company recorded certain non-cash charges totaling RMB377.5 million
    (US$60.6 million), including RMB53.9 million (US$8.6 million) from
    inventory write-down, RMB87.6 million (US$14.1 million) from provisions
    for doubtful debt of accounts receivable and RMB236.0 million (US$37.9
    million) from provisions for advance payments on the Company's purchase
    commitment under long-term supply contracts.
  o Gross loss was RMB261.8 million (US$42.0 million), compared with gross
    loss of RMB56.1 million in 3Q12 and gross loss of RMB604.6 million in
    4Q11.
  o Gross margin decreased to negative 31.3%, compared with negative 5.8% in
    3Q12, due to both the lower ASP and the non-cash charges from inventory
    write-down and provisions for advance payments associated with long-term
    supply contracts. Gross margin in 4Q11 was negative 61.8%. Gross margin
    excluding the aforementioned provisions would have been negative 2.6% in
    4Q12.
  o Operating loss increased by 149.1% to RMB625.8 million (US$100.4 million)
    from an operating loss of RMB251.2 million in 3Q12, compared to an
    operating loss of RMB1, 005.2 million in 4Q11. The increase in operating
    loss in 4Q12 from 3Q12 was primarily due to the significantly higher gross
    loss and  non-cash charge from provisions for doubtful debt of accounts
    and advance payments on the Company's purchase commitment under long-term
    supply contracts..
  o Operating margin decreased to negative 74.8% from negative 26.0% in 3Q12,
    compared with negative 102.8% in 4Q11.
  o Net loss attributable to shareholders on a non-GAAP basis[1] was RMB650.6
    million (US$104.4 million), compared with net loss of RMB301.9 million in
    3Q12 and net loss of RMB862.3 million in 4Q11.
  o Net loss per basic ADS on a non-GAAP basis was RMB7.70 (US$1.24), compared
    with net loss per basic ADS on a non-GAAP basis of RMB3.57 in 3Q12 and net
    loss per ADS on a non-GAAP basis of RMB10.22 in 4Q11. 
  o Net loss attributable to shareholders on a GAAP basis was RMB670.4 million
    (US$107.6 million), compared with net loss attributable to shareholders on
    a GAAP basis of RMB322.1 million in 3Q12.  The Company recorded a non-cash
    gain of RMB1.4 million (US$0.2 million) from the change in fair value of
    the convertible feature of the Company's convertible bonds as compared to
    a non-cash gain of RMB1.2 million in 3Q12.  Net loss attributable to
    shareholders on a GAAP basis in 4Q11 was RMB832.9 million, including a
    non-cash gain of RMB33.2 million from the change in fair value of the
    convertible feature of the Company's convertible bonds.  As explained in
    prior quarters, the fluctuations in the fair value of the convertible
    feature of the Company's convertible bonds are primarily due to changes in
    the Company's ADS price, over which the Company has no direct control, and
    does not reflect the operating performance of the Company. 
  o Net loss per basic ADS on a GAAP basis was RMB7.93 (US$1.27), compared
    with net loss per basic ADS on a GAAP basis of RMB3.81 in 3Q12 and net
    loss per basic ADS on a GAAP basis of RMB9.88 in 4Q11.
  o Annualized Return on Equity ("ROE") on a non-GAAP basis was negative 97.6%
    in 4Q12, compared with negative 38.5% in 3Q12 and negative 81.5% in 4Q11. 
  o Annualized ROE on a GAAP basis was negative 87.0% in 4Q12, compared to
    negative 36.0% in 3Q12 and negative 70.6% in 4Q11.

FULL YEAR 2012 HIGHLIGHTS

  o Total net revenues were RMB3, 678.4 million (US$590.4 million),
    representing a decrease of 42.7% from RMB6,416.5 million in 2011.
  o PV module shipments, including module processing services, reached 829.8
    MW, representing a decrease of 1.7% from 844.4 MW in 2011. Module
    processing services accounted for 4.7% of total revenues in 2012.
  o The Company recorded total non-cash charges of RMB649.7 million (US$104.3
    million), including RMB326.1 million (US$52.3 million) from inventory
    write-down as a result of a lower of cost or market assessment and a
    regular provision for obsolescence, RMB236.0 million (US$37.9 million)
    from provisions for advance payments associated with long-term supply
    contracts, RMB87.6 million (US$14.1 million) from provisions for doubtful
    debt of accounts receivable and RMB 512.0 million (US$ 82.2 million) was
    recognized in cost of revenues and RMB137.7 million (US$ 22.1 million) in
    operating expenses.
  o Gross loss in 2012 was RMB325.5 million (US$52.2 million), compared with a
    gross loss of RMB217.1 million in 2011. 
  o Gross margin was negative 8.8%, compared with negative 3.4% in 2011.
  o Operating loss for 2012 was RMB1, 180.6 million (US$189.5 million),
    compared with an operating loss of RMB1, 096.4 million in 2011.
  o Operating margin was negative 32.1%, compared with negative 17.1% in 2011.
  o Net loss attributable to shareholders on a non-GAAP basis1 was RMB1, 468.3
    million (US$235.7 million), compared with net loss attributable to
    shareholders of RMB1, 068.5 million in 2011.
  o Net loss per basic ADS on a non-GAAP basis was RMB17.39 (US$1.62),
    compared with net loss per basic ADS of RMB12.71 in 2011. 
  o Net loss attributable to shareholders on a GAAP basis was RMB1, 562.9
    million (US$250.9 million), compared with net loss attributable to
    shareholders of RMB930.1 million in 2011.
  o Net loss per basic ADS on a GAAP basis was RMB18.51 (US$2.97), compared
    with net loss per basic ADS of RMB11.06 in 2011.
  o ROE on a non-GAAP basis was negative 47.8% in 2012, compared with negative
    24.8% in 2011.
  o ROE on a GAAP basis was negative 44.3% in 2012, compared with negative
    19.6% in 2011.

    All non-GAAP numbers used in this press release exclude the accounting
    impact from the adoption of ASC 815-40, which relates to the accounting
[1] treatment for the convertible bonds. Please refer to the attached
    financial statements for the reconciliation between the GAAP and non-GAAP
    financial results.

Mr. Ki-Joon HONG, Chairman and CEO of Hanwha SolarOne, commented, "The year
2012 will be remembered as one of tremendous challenge and change for the
solar industry, with significant industry overcapacity and regulatory changes
in key markets leading to a slowdown in demand, accompanied by rapidly
decelerating prices. Almost all companies, including ours, found it virtually
impossible to record profitability in such an operating environment. In spite
of the degrading operating environment we faced, our company made significant
progress in a number of areas; including  bringing greater balance between our
OEM model  and branded one, diversifying our sales base into new emerging
growth markets, improving our non-poly processing cost structure to be
competitive with industry leaders, instituted operational efficiencies at our
manufacturing sites including enhanced automation, better quality, improved
product features and new product introductions,  and secured financing from a
variety of sources both within and outside mainland China."

Chairman HONG continued " Our volumes in the fourth quarter did not reflect
the improving demand environment of late as we chose to sacrifice sales at
loss making prices and our profitability was impacted by a number of non-cash
charges. However, we are well on track to achieving 50% improvement in first
quarter 2013 shipment volume and over 50% for the full year. We have good
visibility in South Africa and Japan for the first half of this year in
particular, and continue to see growing opportunities in China, the US, the
Middle East and other emerging markets of importance. Our funding for 2013 is
proceeding as planned. Industry prices seem to have stabilized, and we see
good opportunities to exploit synergies with our sister company Hanwha
Q.CELLS, including a sizeable module tolling business. Profitability will
remain challenging for most, if not all of 2013, but we feel confident that we
are making good progress on the return to a path of profitability, aided by
forecasted improvements in the operating environment and securing the company
to challenge for industry leadership longer term." 

FOURTH QUARTER 2012 RESULTS

  o Total net revenues were RMB836.7 million (US$134.3 million), a decrease of
    13.4% from RMB966.1 million in 3Q12, and a decrease of 14.5% from RMB978.3
    million in 4Q11. The decrease in total net revenues in 4Q12 compared with
    3Q12 was primarily due to lower shipments and reduced ASP.
  o PV module shipments, including module processing services, were 198.9 MW,
    a decrease from 239.5 MW in 3Q12, and an increase from 189.1 MW in 4Q11.

(Photo:  http://photos.prnewswire.com/prnh/20130318/CN78564-INFO-a  )

(Photo:  http://photos.prnewswire.com/prnh/20130318/CN78564-INFO-b  )

  o  Module shipments to Japan grew from 3% in 3Q12 to 20% in 4Q12 at a good
    pricing level. The China market remained solid for the Company and
    increased from 11% in 3Q12 to 15% of module shipments in 4Q12.  The
    dispersion of shipments this quarter saw relatively new and potentially
    attractive markets come to the forefront with large contributions from
    Greece (16%), Thailand (8%) and India (6%). Historically strong markets
    accounted for a smaller proportion of shipments as a result of the
    aforementioned; shipments from Germany declined to 8% from 39% in 3Q12 as
    the full effect of the July 1 incentives reductions were felt and the US
    decreased to 6% this quarter. In 2012, shipments to Europe and Africa (EA)
    contributed 62% to total module shipments with Asian Pacific (AP)
    accounting for 24% and North America (NA) 8%.
  o Average selling price ("ASP"), excluding module processing services,
    decreased to RMB3.75 per watt (US$0.60) from RMB4.22 per watt in 3Q12 and
    from RMB6.29 per watt in 4Q11. 
  o Gross loss of 4Q12 was RMB261.8 million (US$42.0 million), compared with a
    gross loss of RMB56.1 million in 3Q12 and a gross loss of RMB604.6 million
    in 4Q11. 
  o Gross margin decreased to negative 31.3%, compared with negative 5.8% in
    3Q12, due to both the lower ASP and the non-cash charges from inventory
    write-down and provisions for advance payments on the Company's purchase
    commitment under long-term supply contracts. Gross margin in 4Q11 was
    negative 61.8%.
  o The blended cost of goods sold ("COGS") per watt, excluding module
    processing services, was US$0.81 (including $0.17 non-cash charges from
    inventory write-down and provisions for advance payments associated with
    long-term supply contract), representing a 14.1% increase from US$0.71 in
    3Q12. The blended COGS takes into account the production cost (silicon and
    non-silicon) using internally sourced wafers, purchase costs and
    additional processing costs of externally sourced wafers and cells.
    Excluding non-cash charges, the Company would have achieved a 9.9%
    reduction in blended COGS to $0.64.
  o Operating loss of 4Q12 was RMB625.8 million (US$100.4 million), compared
    with an operating loss of RMB251.2 million in 3Q12 and an operating loss
    of RMB1, 005.2 million in 4Q11. Operating margin decreased to negative
    74.8% from negative 26.0% in 3Q12, compared to negative 102.8% in 4Q11.
  o Operating expenses as a percentage of total net revenues were 43.5% in
    4Q12, compared with 20.2% in 3Q12 and 40.9% in 4Q11.  The higher operating
    expenses in 4Q12 compared with 3Q12 was primarily due to non-cash charges
    from provisions for doubtful debt of accounts receivable and decrease in
    revenue.
  o Interest expense was RMB73.9 million (US$11.9 million), compared with
    RMB79.9 million in 3Q12 and RMB41.7 million in 4Q11. 
  o The Company recorded a net gain of RMB19.0 million (US$3.0 million), which
    combined a foreign exchange gain with a loss from the change in fair value
    of derivatives.  The Company recorded a net gain of RMB18.1 million in
    3Q12 and a net loss of RMB0.1 million in 4Q11 for the foreign exchange
    gain/loss and the gain/loss from change in fair value of derivatives.
  o Gain from the change in fair value of the conversion feature of the
    Company's convertible bonds was RMB1.4 million (US$0.2 million), compared
    with RMB1.2 million in 3Q12 and RMB33.2 million in 4Q11.  The fluctuations
    resulting from the adoption of ASC 815-40 on January 1, 2009, were
    primarily due to changes in the Company's ADS price during the quarter.
    This line item has fluctuated, and is expected to continue to fluctuate
    quarter-to-quarter. The Company has no direct control over the
    fluctuations.
  o Income tax benefit in 4Q12 increased to RMB9.1 million (US$1.5 million),
    compared with RMB15.8 million in 3Q12 and RMB179.9 million in 4Q11.
  o Net loss attributable to shareholders on a non-GAAP basis1 was RMB650.6
    million (US$104.4 million), compared with a net loss attributable to
    shareholders of RMB301.9 million in 3Q12 and a net loss attributable to
    shareholders of RMB862.3 million in 4Q11.
  o Net loss per basic ADS on a non-GAAP basis was RMB7.70 (US$1.24), compared
    with net loss per basic ADS on a non-GAAP basis of RMB3.57 in 3Q12 and net
    loss per basic ADS on a non-GAAP basis of RMB10.22 in 4Q11. 
  o Net loss attributable to shareholders on a GAAP basis was RMB670.4 million
    (US$107.6 million), compared with net loss attributable to shareholders of
    RMB322.1 million in 3Q12 and net loss attributable to shareholders of
    RMB832.9 million in 4Q11.
  o Net loss per basic ADS on a GAAP basis was RMB7.93 (US$1.27), compared
    with net loss per basic ADS of RMB3.81 in 3Q12 and net loss per basic ADS
    of RMB9.88 in 4Q11.
  o  Annualized ROE on a non-GAAP basis was negative 97.6% in 4Q12, compared
    with negative 38.5% in 3Q12 and negative 81.5% in 4Q11.
  o  Annualized ROE on a GAAP basis was negative 87.0% in 4Q12, compared with
    negative 36.0% in 3Q12 and negative 70.6% in 4Q11.

FINANCIAL POSITION

As of December 31, 2012, the Company had cash and cash equivalents of RMB676.5
million (US$108.6 million) and net working capital of RMB44.3 million (US$7.1
million), compared with cash and cash equivalents of RMB1,607.2 million and
net working capital of RMB915.4 million as of September 30, 2012.  Total
short-term bank borrowings (including the current portion of long-term bank
borrowings) were RMB1, 629.6 million (US$261.6 million), compared with RMB1,
917.7 million as of September 30, 2012.    

As of December 31, 2012, the Company had total long-term debt of RMB2, 653.7
million (US$425.9 million), which comprised both long-term bank borrowings and
convertible notes payable. The Company's long-term bank borrowings are to be
repaid in installments until their maturities ranging from 2 to 4 years. 
Holders of the convertible notes have the option to require the Company to
redeem the notes beginning on January 15, 2015.

Net cash used in operating activities in 4Q12 was RMB440.7 million (US$70.7
million), compared with net cash used in operating activities of RMB322.1
million in 3Q12 and net cash generated from operating activities of RMB311.3
million in 4Q11.

As of December 31, 2012, accounts receivable were RMB957.0 million (US$153.6
million), compared with RMB1, 154.6 million as of September 30, 2012 and
RMB537.5 million as of December 31, 2011.  Day's sales outstanding (DSO)
increased to 164 days in 4Q12 from 126 days in 3Q12 and 82 days in 4Q11. The
decline in receivables from 3Q12 to 4Q12 reflects lower shipments and
revenues. The increase in DSO reflects longer credit terms to meet industry
competitive standards. As of December 31, 2012, inventories increased to
RMB838.7 million (US$134.6 million) from RMB757.0 million as of September 30,
2012, and from RMB684.0 million as of December 31, 2011.  Day's inventory was
65 days in 4Q12 compared with 63 days in 3Q12 and 53 days in 4Q11.

Capital expenditures were RMB71.4 million (US$11.5 million) in 4Q12.  For full
year 2012, total capital expenditures were RMB598.0 million (US$96.0 million).

The Company has from time to time been buying back its convertible bonds since
January 1, 2012 and may do so in the future, subject to market conditions and
other factors. The Company has purchased approximately $72 million out of
US$172.5 million in face value.

CAPACITY EXPANSION

As of December 31, 2012, the Company had production capacities of 800 MW for
ingot and wafer, 1.3 GW for cell and 1.5 GW for module. The Company currently
has no near-term plan to add additional capacities. Management will review
expansion needs in the future in line with changes in overall market demand.

BUSINESS OUTLOOK

  o The Company provides the following guidance based on current operating
    trends and market conditions.

For the first quarter 2013 the Company expects:

  o Module shipments 300MW or above.

For the full year 2013, the Company expects:

  o Module shipments between 1.3-1.5GW of which about 30-35% will be for PV
    module processing services.
  o Capital expenditures of $50 million depending on demand and other market
    conditions.

CONFERENCE CALL

The Company will host a conference call to discuss the fourth quarter and full
year of 2012 results at 8:00 AM Eastern Time (8:00 PM Shanghai Time) on March
18, 2013.

Mr. Ki-Joon HONG, Chairman and CEO; Mr. MinSu KIM, President; Mr. Dong Kwan
KIM, Chief Strategy Officer; Mr. Jung Pyo SEO, Chief Financial Officer; and
Mr. Paul Combs, Vice President of Investor Relations, will discuss the results
and take questions following the prepared remarks. 

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

U.S. Toll Free                                                        1 866
Number:                                                               519 4004
U.S. New York local number:                                           1 718
                                                                      354 1231
International dial-in number:                                         +65 6723
                                                                      9381
China Toll Free Number:                                               800 819
                                                                      0121
                                                                      400 620
                                                                      8038
Passcode:                                                             HSOL

A live webcast of the conference call will be available on the investor
relations section of the Company's website at: http://www.hanwha-solarone.com.
A replay of the webcast will be available for one month.

A telephone replay of the call will be available for seven days after the
conclusion of the conference call. The dial-in details for the replay are as
follows:

U.S. Toll Free Number:        1 866 214 5335
International dial-in number: +1 612 8235 5000
Pass code:                    55275126

FOREIGN CURRENCY CONVERSION

The conversion in this release of Renminbi into U.S. dollars is made solely
for the convenience of the reader, and is based on the exchange rate as set
forth in the H.10 statistical release of the Federal Reserve Board as of
December 31, 2012, which was RMB6.2301 to US$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,
2012 or at any other date. The percentages stated in this press release are
calculated based on Renminbi amounts.

USE OF NON-GAAP FINANCIAL MEASURES

The Company has included in this press release certain non-GAAP financial
measures, including certain line items presented on the basis that the
accounting impact of ASC 815-40 had not been recorded. The Company believes
that both management and investors benefit from referring to these non-GAAP
financial measures in assessing the performance of the Company and when
planning and forecasting future periods. Readers are cautioned not to view
non-GAAP financial measures on a stand-alone basis or as a substitute for GAAP
measures, or as being comparable to results reported or forecasted by other
companies, and should refer to the reconciliation of GAAP measures with
non-GAAP measures also included herein.

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
include 1Q and full-year 2012 estimates for PV product shipments, ASPs,
production capacities and other results of operations. Forward-looking
statements involve inherent risks and uncertainties and actual results may
differ materially from such estimates depending on future events and other
changes in business climate and market conditions. Hanwha SolarOne disclaims
any obligation to update or correct any forward-looking statements.

About Hanwha SolarOne

Hanwha SolarOne Co., Ltd. (NASDAQ: HSOL) is a vertically-integrated
manufacturer of silicon ingots, wafers, PV cells and modules. Hanwha SolarOne
offers high-quality, reliable products and services at competitive prices.
Partnering with third-party distributors, OEM manufacturers, and systems
integrators, Hanwha SolarOne serves the utility, commercial, government, and
residential markets. The Company maintains a strong presence worldwide, with
employees located throughout Europe, North America and Asia, and embraces
environmental responsibility and sustainability, with an active role in the
voluntary photovoltaic recycling program. Hanwha Group, Hanwha SolarOne's
largest shareholder, is active in solar project development and financing, and
plans to produce polysilicon in the future. For more information, please
visit: http://www.hanwha-solarone.com

Financial Statements

Hanwha SolarOne Co., Ltd.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$")
                December 31  September    December 31   December 31 
                             31
               2011          2012        2012          2012
                (Audited)    (Unaudited) (Unaudited)   (Unaudited)
                RMB'000      RMB'000     RMB'000       US$'000
ASSETS
Current
assets
Cash and cash  1,976,555     1,607,164   676,476       108,582
equivalents
Restricted     281,626       228,132     150,462       24,151
cash
Derivative     29,091        -           -             -
contracts
Accounts
receivable,    537,540       1,154,597   956,969       153,604
net
Notes          60,208        5,429       2,681         430
receivable
Inventories,   684,049       756,966     838,727       134,625
net
Advance to
suppliers,     475,645       401,675     166,838       26,779
net
Other current  528,572       344,587     356,784       57,268
assets
Deferred tax   264,590       249,136     150,297       24,124
assets - net
Amount due
from related   241,453       422,205     420,610       67,513
parties
    Total
current        5,079,329     5,169,891   3,719,844     597,076
assets
Non-current
assets
Fixed assets   4,715,962     4,784,458   4,779,873     767,222
– net
Intangible     334,987       336,819     335,047       53,779
assets – net
Deferred tax   16,493        8,237       107,304       17,224
assets - net
Long-term
deferred       49,702        29,854      25,200        4,045
expenses
Long-term      204,570       176,884     184,065       29,544
prepayment
    Total
non-current    5,321,714     5,336,252   5,431,489     871,814
assets
TOTAL ASSETS   10,401,043    10,506,143  9,151,333     1,468,890
LIABILITIES
Current
liabilities
Derivative     30,670        13,834      17,311        2,779
contracts
Short-term
bank           1,764,251     1,459,990   1,162,372     186,574
borrowings
Long-term
bank
borrowings,    242,604       457,725     467,204       74,991
current
portion
Accounts       1,024,947     1,076,029   1,061,723     170,418
payable
Notes payable  462,602       641,135     314,517       50,483
Accrued
expenses and   375,238       364,028     400,537       64,291
other
liabilities
Customer       84,871        46,490      36,314        5,829
deposits
Unrecognized   143,473       143,473     143,473       23,029
tax benefit
Amount due to
related        42,342        51,815      72,045        11,564
parties
    Total
current        4,170,998     4,254,519   3,675,496     589,958
liabilities
Non-current
liabilities
Long-term
bank           1,352,373     2,406,121   2,285,106     366,785
borrowings
Convertible    498,646       351,778     368,590       59,163
bonds
Long term      50,000        52,450      50,000        8,026
payable
Deferred tax   25,387        24,945      24,798        3,980
liabilities
    Total
non-current    1,926,406     2,835,294   2,728,494     437,954
liabilities
TOTAL          6,097,404     7,089,813   6,403,990     1,027,912
LIABILITIES
Redeemable
ordinary       24            24          24            4
shares
EQUITY
Shareholders'
equity
Ordinary       315           316         316           51
shares
Additional
paid-in        3,996,418     4,002,418   4,004,199     642,718
capital
Statutory      174,456       174,727     174,456       28,002
reserves
Retained       132,426       (760,294)   (1,430,433)   (229,600)
earnings
Accumulated
other          -             (861)       (1,219)       (197)
comprehensive
income
    Total
shareholders'  4,303,615     3,416,306   2,747,319     440,974
equity
TOTAL EQUITY   4,303,639     3,416,330   2,747,343     440,978
TOTAL
LIABILITIES,
REDEEMABLE
ORDINARY       10,401,043    10,506,143  9,151,333     1,468,890
SHARES AND
SHAREHOLDERS'
EQUITY

 

 

Hanwha SolarOne Co., Ltd.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$"),
except for number of shares (ADS) and per share (ADS) data
                                       For the three months ended                          For the years ended
                                       December 31   September    December    December 31  December 31    December    December
                                                     30          31                                      31          31 
                                       2011          2012        2012        2012          2011          2012        2012
                                        (Unaudited)  (Unaudited) (Unaudited) (Unaudited)    (Unaudited)  (Unaudited) (Unaudited)
                                       RMB'000       RMB'000     RMB'000     US$'000       RMB'000       RMB'000     US$'000
Net revenues                           978,272       966,129     836,663     134,293       6,416,485     3,678,380   590,420
Cost of revenues                       (1,582,900)   (1,022,182) (1,098,413) (176,307)     (6,633,542)   (4,003,885) (642,667)
                                       -             -           -           -             -             -           -
Gross profit / (loss)                  (604,628)     (56,053)    (261,750)   (42,014)      (217,057)     (325,505)   (52,247)
Operating expenses
Selling expenses                       (98,185)      (98,322)    (115,663)   (18,565)      (279,788)     (348,568)   (55,949)
G&A expenses                           (145,565)     (73,807)    (221,653)   (35,578)      (396,639)     (415,707)   (66,726)
R&D expenses                           (22,071)      (23,001)    (26,709)    (4,287)       (68,217)      (90,820)    (14,578)
Loss on goodwill impairment            (134,735)     -                                     (134,735)     -           -
                                       -             -           -           -             -             -           -
    Total operating expenses           (400,556)     (195,130)   (364,025)   (58,430)      (879,379)     (855,095)   (137,253)
                                       -             -           -           -             -             -           -
Operating loss                         (1,005,184)   (251,183)   (625,775)   (100,444)     (1,096,436)   (1,180,600) (189,500)
Interest expenses                      (41,732)      (79,876)    (73,927)    (11,866)      (171,059)     (299,515)   (48,075)
Interest income                        3,207         5,489       3,237       520           11,763        15,841      2,543
Exchange gain (loss)                   (5,029)       25,783      21,669      3,478         (3,965)       8,875       1,425
Gain (loss) on change in fair value of 4,919         (7,667)     (2,688)     (431)         (70,778)      5,326       855
derivative
Gain (loss) on change in conversion    33,181        1,219       1,411       226           264,384       (5,692)     (914)
feature fair value of convertible bond
Loss on extinguishment of debt         -             (29,054)    -           -             -             (82,713)    (13,276)
Other income                           1,808         2,259       2,739       440           5,144         9,265       1,487
Other expenses                         (3,986)       (4,880)     (6,150)     (987)         (14,102)      (18,391)    (2,952)
                                       -             -           -           -             -             -           -
Net loss before income tax             (1,012,816)   (337,910)   (679,484)   (109,064)     (1,075,049)   (1,547,604) (248,407)
Income tax expenses                    179,877       15,776      9,074       1,456         144,945       (15,255)    (2,449)
                                       -             -           -           -             -             -           -
Net loss                               (832,939)     (322,134)   (670,410)   (107,608)     (930,104)     (1,562,859) (250,856)
                                       -             -           -           -             -             -           -
Net loss attributable
to shareholders                        (832,939)     (322,134)   (670,410)   (107,608)     (930,104)     (1,562,859) (250,856)
Net loss per share
Basic                                  (1.98)        (0.76)      (1.59)      (0.25)        (2.21)        (3.70)      (0.59)
Diluted                                (1.98)        (0.76)      (1.59)      (0.25)        (2.21)        (3.70)      (0.59)
Shares used in computation
Basic                                  421,676,232   422,255,918 422,565,284 422,565,284   420,325,701   422,167,505 422,167,505
Diluted                                421,676,232   422,255,918 422,565,284 422,565,284   420,325,701   422,167,505 422,167,505
Net loss per ADS
Basic                                  (9.88)        (3.81)      (7.93)      (1.27)        (11.06)       (18.51)     (2.97)
Diluted                                (9.88)        (3.81)      (7.93)      (1.27)        (11.06)       (18.51)     (2.97)
ADSs used in computation
Basic                                  84,335,246    84,451,184  84,513,057  84,513,057    84,065,140    84,433,501  84,433,501
Diluted                                84,335,246    84,451,184  84,513,057  84,513,057    84,065,140    84,433,501  84,433,501

 

Hanwha SolarOne Co., Ltd.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$")
                                                         For the three months ended                      For the years ended
                                                         December    September   December    December    December    December    December
                                                         31, 2011    30, 2012    31, 2012    31, 2012    31, 2011    31, 2012    31, 2012
                                                         (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                                                         RMB'000     RMB'000     RMB'000     US$'000     RMB'000     RMB'000     US$'000
Cash flow from operating activities      
  Net loss                                               (832,939)   (322,134)   (670,410)   (107,608)   (930,104)   (1,562,859) (250,856)
Adjustments to reconcile net income
(loss) to net cash
   provided (used) in operating activities:             
   Unrealised (gain)/loss from derivative contracts      (31,154)    10,911      3,477       558         1,021       15,732      2,524
   Amortization of convertible bonds discount            26,133      22,454      18,223      2,925       75,595      88,507      14,207
   Changes in fair value of conversion feature of        (33,181)    (1,229)     (1,411)     (226)       (264,384)   5,692       914
     convertible bonds
   Loss on extinguishment of debt                        -           29,054      -           -           -           82,713      13,276
   Loss from disposal of fixed assets                    473         2,986       1,364       219         1,714       8,497       1,364
   Depreciation and amortization                         52,464      92,769      107,232     17,211      218,641     373,155     59,896
   Loss on goodwill impairment                           134,735     -           -           -           134,735     -           -
   Amortization of long-term deferred expenses           6,129       4,551       4,616       741         11,408      21,577      3,463
   Provision for doubtful debt of advance to suppliers   287,749     -           170,012     27,289      287,742     170,012     27,289
   Provision for doubtful debt of other receivables      54,456      -           50,048      8,033       54,456      50,048      8,033
   Provision for amount due from related party           -           -           15,960      2,562       -           15,960      2,562
   Reversal of doubtful debt of advance to suppliers     -           -           -           -           -           -           -
   Provision for doubtful debt of accounts receivable    -           -           87,626      14,065      1,778       87,626      14,065
   Write down of inventories                             305,820     44,916      53,926      8,656       583,097     326,051     52,335
   Stock compensation expense                            2,208       2,197       1,781       286         38,331      7,782       1,249
   Warranty provision                                    8,641       4,662       6,788       1,090       61,059      25,694      4,124
   Warranty reversal                                     (7,022)     (6,688)     (389)       (62)        (30,615)    (9,958)     (1,598)
   Deferred tax benefit                                  (112,641)   (15,242)    (375)       (60)        (173,303)   22,893      3,675
   Unrecognized tax benefit                              (26,344)    -           -           -                                   -
Changes in operating assets and liabilities
   Restricted cash                                       25,974      (44,117)    84,390      13,546      (28,693)    12,379      1,987
   Inventory                                             195,468     (116,995)   (135,687)   (21,779)    (476,373)   (480,729)   (77,162)
   Account and notes receivables                         726,054     (350,744)   112,392     18,041      693,281     (450,747)   (72,351)
   Advance to suppliers and long-term prepayments        124,433     26,088      57,644      9,252       85,883      159,300     25,569
   Long-term deferred expenses                           (2,322)     -           -           -           (2,322)     (1,484)     (238)
   Intangible assets                                     -           -           -           -           (134,719)   (7,104)     (1,140)
   Other current assets                                  (128,730)   9,550       (62,079)    (9,965)     (206,408)   135,524     21,753
   Amount due from related parties                       (144,669)   (98,377)    (14,365)    (2,306)     (198,634)   (195,117)   (31,318)
   Accounts and notes payable                            (360,070)   364,254     (377,764)   (60,635)    381,841     48,150      7,728
   Accrued expenses and other liabilities                25,049      31,388      32,706      5,248       (60,025)    17,347      2,784
   Customer deposits                                     25,955      (17,414)    (10,176)    (1,633)     51,333      (48,557)    (7,794)
   Amount due to related parties                         (11,320)    2,640       26,254      4,214       29,159      29,703      4,768
   Long-term payable                                     -           2,450       (2,450)     (393)       50,000      -           -
Net cash provided (used) in operating activities         311,349     (322,070)   (440,667)   (70,731)    255,494     (1,052,213) (168,892)
Cash flows from investing activities
   Acquisition of fixed assets                           (289,902)   (80,052)    (71,423)    (11,464)    (2,400,481) (597,978)   (95,982)
   Change of restricted cash                             27,638      1,472       (5,495)     (882)       (37,443)    63,461      10,186
Net cash provided (used) in investing activities         (262,264)   (78,580)    (76,918)    (12,346)    (2,437,924) (534,517)   (85,796)
Cash flows from financing activities
   Proceeds from share lending                           -           -           -           -           9           -           -
   Proceeds from exercise of stock option                -           -           -           -           1,135       -           -
   Payment for repurchase of redeemable oridnary         (18)        -           -           -           (18)        -           -
     shares
   Payment for repurchase of convertible bonds           -           (99,440)    -           -           (16)        (299,271)   (48,036)
   Change of restricted cash                             (115,000)   417,670     (1,225)     (197)       (115,000)   55,324      8,880
   Proceeds from short-term bank borrowings              1,045,751   968,467     100,627     16,152      3,322,480   2,661,172   427,147
   Proceeds from long-term bank borrowings               116,515     6,457       -           -           1,594,977   1,369,370   219,799
   Payment of short term bank borrowings                 (886,711)   (1,029,047) (398,245)   (63,923)    (1,877,148) (3,263,051) (523,756)
   Payment for long term bank borrowings                 (20,000)    (38,896)    (111,536)   (17,903)    (350,000)   (212,037)   (34,034)
   Payment of arrangement fee of long-term loans         (42,586)    (5,188)     (2,596)     (417)       (42,586)    (18,355)    (2,946)
   Payment of arrangement fee of short-term loans        (5,625)     (1,474)     (128)       (21)        (5,625)     (6,501)     (1,043)
Net cash provided (used) by financing activities         92,310      218,549     (413,103)   (66,309)    2,528,208   286,651     46,011
Net increase (decrease) in cash and cash equivalents     141,395     (182,101)   (930,688)   (149,386)   345,778     (1,300,079) (208,677)
Cash and cash equivalents at the beginning of period     1,835,160   1,789,265   1,607,164   257,968     1,630,777   1,976,555   317,259
Cash and cash equivalents at the end of period           1,976,555   1,607,164   676,476     108,582     1,976,555   676,476     108,582
Supplemental disclosure of cash flow information:
   Interest paid                                         (9,609)     51,848      26,421      4,241       54,828      164,536     26,410
   Income tax paid                                       3,442       (10,331)    549         88          152,681     47,212      7,578
   Realized gain/(loss) from derivative contracts        (26,235)    3,243       790         127         (69,757)    21,059      3,380
Supplemental schedule of non-cash activities:
   Acquisition of fixed assets included in accounts      85,371      (30,023)    30,816      4,946       446,314     (159,459)   (25,595)
     payable, accrued expenses and other liabilities

 

 

 

                                              For the three months ended                  For the years ended
                                              December   September  December   December   December   December   December
                                              31, 2011   30, 2012   31, 2012   31, 2012   31, 2011   31, 2012   31, 2012
                                              (RMB       (RMB       (RMB       (US$       (RMB       (RMB       (US$
                                              million)   million)   million)   milllion)  million)   million)   milllion)
Non-GAAP net loss                             (862.3)    (301.9)    (650.6)    (104.4)    (1,068.5)  (1,468.3)  (235.7)
Fair value changes of the conversion features 33.3       1.2        1.4        0.2        264.4      (5.7)      (0.9)
of the Convertible bonds
Accretion of interest of the Convertible      (30.2)     (21.4)     (21.2)     (3.4)      (97.5)     (88.9)     (14.3)
bonds
Unrecognized tax benefit                      26.3       -          -          -          -          -          -
Severance fee to previous senior management   -          -          -          -          (32.6)     -          -
Tax impact of severance fee to previous       -          -          -          -          4.1        -          -
senior management
GAAP net loss                                 (832.9)    (322.1)    (670.4)    (107.6)    (930.1)    (1,562.9)  (250.9)
                                              For the three months ended                  For the years ended
                                              December   September  December   December   December   December   December
                                              31, 2011   30, 2012   31, 2012   31, 2012   31, 2011   31, 2012   31, 2012
                                              (RMB)      (RMB)      (RMB)      (US$)      (RMB)      (RMB)      (US$)
Non GAAP net loss per ADS - Basic             (10.22)    (3.57)     (7.70)     (1.24)     (12.71)    (17.39)    (2.79)
Fair value changes of the conversion features 0.39       0.01       0.02       0.01       3.14       (0.07)     (0.01)
of the Convertible bonds
Accretion of interest of the Convertible      (0.36)     (0.25)     (0.25)     (0.04)     (1.16)     (1.05)     (0.17)
bonds
Unrecognized tax benefit                      0.31       -          -          -          -          -          -
Severance fee to previous senior management   -          -                                (0.38)     -          -
Tax impact of severance fee to previous       -          -                                0.05       -          -
senior management
Net loss contributed to shareholders per ADS  (9.88)     (3.81)     (7.93)     (1.27)     (11.06)    (18.51)    (2.97)
- Basic
ADS (Basic)                                   84,335,246 84,451,184 84,513,057 84,513,057 84,065,140 84,433,501 84,433,501
                                              For thee months ended                       Annualized for the three months   For the twelve    For the twelve
                                                                                          ended                             months ended      months ended
                                              December   September  December              December   September  December    December 31, 2011 December 31, 2012
                                              31, 2011   30, 2012   31, 2012              31, 2011   30, 2012   31, 2012
Non-GAAP Return on Equity                     -20.37%    -9.62%     -24.41%               -81.48%    -38.48%    -97.64%     -24.75%           -47.80%
Fair value changes of the conversion features 2.80%      1.21%      3.35%                 11.20%     4.84%      13.40%      7.81%             5.99%
of the Convertible bonds
Accretion of interest of the Convertible      -0.64%     -0.60%     -0.69%                -2.56%     -2.40%     -2.76%      -2.05%            -2.52%
bonds
Unrecognized tax benefit                      0.56%      -          -                     2.24%      -          -           -                 0
Severance fee to previous senior management   -          -          -                     -          -          0           -0.69%            0
Tax impact of severance fee to previous       -          -          -                     -          -          0           0.09%             0
senior management
GAAP Return on equity                         -17.65%    -9.01%     -21.75%               -70.60%    -36.04%    -87.00%     -19.59%           -44.33%

SOURCE Hanwha SolarOne Co., Ltd.

Website: http://www.hanwha-solarone.com
Contact: Hanwha SolarOne Co., Ltd., Investor Contact: Paul Combs, V.P.
Investor Relations, Building 1, 18th Floor, 1199 Minsheng Road, Shanghai, PRC
200135, P. R. China, Tel: +86 21 3852 1533, Mobile: +86 138 1612 2768,
paul.combs@hanwha-solarone.com
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