Trina Solar Announces First Quarter 2013 Results PR Newswire CHANGZHOU, China, May 29, 2013 CHANGZHOU, China, May 29, 2013 /PRNewswire/ -- Trina Solar Limited (TSL) ("Trina Solar" or the "Company"), a global leader in photovoltaic ("PV") modules, solutions, and services, today announced its financial results for the first quarter of 2013. First Quarter 2013 Financial and Operating Highlights oSolar module shipments were approximately 393 MW during the first quarter of 2013, representing a sequential decrease of 5.3% from the fourth quarter of 2012 oNet revenues were $260.2 million, a decrease of 14.0% from the fourth quarter of 2012 oGross profit was $4.4 million, a decrease of 21.5% from the fourth quarter of 2012 oGross margin was 1.7%, compared to 1.9% in the fourth quarter of 2012 oThe Company had an accounts receivables provision reversal of $11.1 million in the first quarter of 2013 oOperating loss was $40.1 million, compared to $70.4 million in the fourth quarter of 2012 oOperating margin was negative 15.4%, compared to negative 23.3% in the fourth quarter of 2012 oThe Company had a foreign currency exchange loss of $19.0 million, net of changes in the fair value of derivative instruments oNet loss was $63.7 million, compared to a net loss of $87.2 million in the fourth quarter of 2012 oLoss per fully diluted American Depositary Share ("ADS" and each ADS represents 50 of the Company's ordinary shares) was $0.90, compared to $1.23 in the fourth quarter of 2012 "While the average selling price ("ASP") of modules continued to decline in the first quarter due to the lingering supply-demand imbalance in the global PV industry, the rate of decline has slowed from previous quarters," said Mr. Jifan Gao, chairman and CEO of Trina Solar. "In this environment, we continue to focus on improving operational efficiency and exercising financial discipline. In the first quarter, the reductions in non-silicon costs we achieved outweighed the fall in ASP, and we also collected a sizeable amount of overdue accounts receivables. These efforts enable us to maintain strong liquidity and a robust balance sheet, making us better positioned to capture future growth opportunities. "As previously announced, we completed several restructuring and streamlining initiatives in the second half of 2012 and we saw sustained improvements in our general and administrative expenses in the first quarter of 2013. We will continue to strictly control operating costs while maintaining our product quality and service capabilities. In terms of revenues, we achieved strong sequential shipment growth in Japan and India, two of the most important emerging markets for the PV industry. In Europe we worked to retain quality customers and were also able to diversify our customer base. Trina Solar remains committed to continuing to serve our customers and business partners in Europe as the EU's preliminary determination on antidumping and countervailing duty tariffs against Chinese solar products approaches. "At the beginning of the year, we announced that the Company had been awarded the right to develop a 50 MW solar project in Gansu province, China. We began construction on the project during the end of the first quarter and expect to connect the project to the power grid and begin limited production by the end of the third quarter of 2013. For our downstream systems business, we remain committed to focusing on R&D and delivering innovative products and solutions to lower installation costs, while enhancing the efficiencies and ease-of-use of solar energy." Recent Business Highlights During the first quarter of 2013, the Company: oObtained approval from the Gansu Provincial Development and Reform Commission to develop a 50 MW grid-connected solar power plant in Wuwei, Gansu Province. The project is part of a plan to stimulate the economy in a region challenged by semi-desert conditions. The Wuwei municipality is well-suited for solar energy production due to favorable irradiance and the ability to sell and transmit electricity to other regions in addition to supplying local needs. oAnnounced that it will supply 30 MW of photovoltaic modules to Gestamp Solar, one of the world's leading companies in the development and management of photovoltaic parks, for two projects in South Africa. Large-scale solar power systems will be installed in the towns of Prieska and De Aar in Northern Cape Province, with the capacity to generate 20 MW and 10 MW respectively. According to the terms of the agreement, deliveries will be made in the third quarter of 2013. oAnnounced 60-cell PDG5, the first in Trina Solar's new line of dual-rated frameless modules. The PDG5 is resistant to potential induced degradation (PID) and micro-cracking, and does not require grounding. The PDG5 provides reliable performance under stressful environmental conditions. oAnnounced that according to a new report from Solar Business Services, titled "Australian PV - Technology and Brands 2013", Trina Solar was the most popular solar panel brand in Australia during 2012, accounting for 100 MW of installations. oAnnounced that it has been recognized by Fast Company magazine in their 2013 list of The World's Top 10 Most Innovative Companies in China. oAnnounced a new slimline frame design across its full range of 72-cell monocrystalline and 60-cell polycrystalline modules. Frame thickness has been reduced from 40mm to 35mm, and products are immediately available. Subsequent Events Subsequent to the first quarter of 2013, the Company: oFiled its annual report on Form 20-F for the fiscal year ended December 31, 2012 with the Securities and Exchange Commission on April 2, 2013. oAnnounced that Jodie Roussell, Head of Public Affairs Europe at TrinaSolar, had been elected Vice-President of the Board of the European Photovoltaic Industry Association (EPIA) at the EPIA's annual general meeting in Brussels in March 2013. First Quarter 2013 Results Net Revenues Net revenues in the first quarter of 2013 were $260.2 million, a decrease of 14.0% sequentially and 25.6% year-over-year. Total shipments were 392.6 MW, compared to 414.5 MW in the fourth quarter of 2012 and 380.0 MW in the first quarter of 2012. The sequential decrease in shipments was caused primarily by a seasonal weakness in China, which, together with the continuous decline in ASP due to supply-demand imbalances, caused the decrease in revenues. Gross Profit and Margin Gross profit in the first quarter of 2013 was $4.4 million, compared to a gross profit of $5.6 million in the fourth quarter of 2012 and $20.3 million in the first quarter of 2012. Gross margin was 1.7% in the first quarter of 2013, compared to 1.9% in the fourth quarter of 2012 and 5.8% in the first quarter of 2012. The year-on-year decrease in gross margin was due primarily to declines in the ASP of modules that exceeded decreases in costs during the past year. Operating Expense, Loss and Margin Operating expenses in the first quarter of 2013 were $44.5 million, a decrease of 41.5% sequentially and a decrease of 26.0% year-over-year. The Company's operating expenses represented 17.1% of its first quarter net revenues, a decrease from 25.1% in the fourth quarter of 2012 and 17.2% in the first quarter of 2012. The sequential percentage decrease was primarily due to an accounts receivables provision reversal of $11.1 million during the first quarter of 2013 and expense control measures taken by the Company since the second half of 2012. Operating expenses in the first quarter of 2013 included $1.1 million in share-based compensation expenses, compared to $0.1 million in the fourth quarter of 2012 and $2.0 million in the first quarter of 2012. As a result of the foregoing, operating loss in the first quarter of 2013 was $40.1 million, compared to operating losses of $70.4 million in the fourth quarter of 2012 and $39.9 million in the first quarter of 2012. Operating margin was negative 15.4% in the first quarter of 2013, compared to negative 23.3% in the fourth quarter of 2012 and negative 11.4% in the first quarter of 2012. Net Interest Expense Net interest expense in the first quarter of 2013 was $13.2 million, compared to $11.4 million in the fourth quarter of 2012 and $8.8 million in the first quarter of 2012. The sequential increase in net interest expense was primarily due to an increase in average bank borrowings in the first quarter of 2013. Foreign Currency Exchange Loss and Gain The Company had a foreign currency exchange loss of $19.0 million in the first quarter of 2013, which included changes in fair value of derivative instruments, compared to a net gain of $4.7 million in the fourth quarter of 2012 and a net gain of $9.0 million in the first quarter of 2012. This net loss was primarily due to the depreciation of the Euro and Japanese Yen against the U.S. dollar during the first quarter of 2013, offset by gains from foreign currency hedging contracts involving the Euro, Renminbi, and U.S. dollar used by the Company to mitigate its foreign currency risk exposure. Income Tax Benefit and Expense Income tax benefit was $6.1 million in the first quarter of 2013, compared to income tax expense of $11.3 million in the fourth quarter of 2012 and income tax benefit of $8.8 million in the first quarter of 2012. The income tax benefit in the first quarter of 2013 primarily resulted from a deferred tax benefit recognized in connection with the net operating losses incurred in the quarter, net of provision for valuation allowance. Net Loss and Loss per ADS As a result of the foregoing, net loss was $63.7 million in the first quarter of 2013, compared to net loss of $87.2 million in the fourth quarter of 2012 and $29.8 million in the first quarter of 2012. Net margin was negative 24.5% in the first quarter of 2013, compared to negative 28.8% in the fourth quarter of 2012 and negative 8.5% in the first quarter of 2012. Loss per fully diluted ADS was $0.90 in the first quarter of 2013. The impact of accounts receivables provision reversal was approximately $0.16, while the effect of the foreign currency exchange net loss was approximately $0.27, per ADS. Financial Condition As of March 31, 2013, the Company had $822.3 million in cash and cash equivalents and restricted cash, and a working capital balance of $238.5 million. Total bank borrowings were $1,226.4 million, of which $395.5 million were long-term borrowings.The Company decreased its short-term borrowings by $45.0 million to approximately $830.8 million as of March 31, 2013. At the end of the first quarter of 2013, $83.6 million of the Company's convertible senior notes due July 2013 remained outstanding, which remained unchanged from the fourth quarter of 2012. Shareholders' equity was $823.5 million as of March 31, 2013, a decrease from $881.8 million at the end of the fourth quarter of 2012. Second Quarter and Fiscal Year 2013 Guidance During the second quarter of 2013, the Company expects to ship between 500 MW to 530 MW of PV modules. The Company believes its overall gross margin for the second quarter, taking into account wafer and cell quantities outsourced from third party suppliers to meet demand in excess of its internal capacity and other needs, will be in the middle single-digits in percentage terms. Such guidance is based on the exchange rate between the Euro and U.S. dollar as of May 29, 2013. For the full year 2013, the Company maintains its previous guidance of 2.0 GW to 2.1 GW for total PV module shipments. Operations and Business Outlook Manufacturing Costs In the first quarter of 2013, the Company continued its efforts to reduce manufacturing costs, achieving a reduction of high single digit in percentage terms from a quarter ago. The sequential decrease in non-silicon manufacturing costs were primarily due to improved supply chain cost control, increased utilization of the Company's in-house manufacturing capacities, as well as increases in the Company's module efficiencies and improvements in its manufacturing processes. As a result of increased average poly-silicon spot prices in the first quarter of 2013 compared to the fourth quarter of 2012, the Company experienced a sequential increase in silicon costs in its module manufacturing business. Through its diversified range of short, medium and long-term supply agreements, the Company will continue to maintain competitive silicon costs relative to current market prices. 2013 Manufacturing Capacity As of March 31, 2013, the Company's annualized in-house ingot and wafer production capacity remained approximately 1.2 GW and its PV cell and module production capacity remained approximately 2.4 GW. Project Development The Company has commenced the construction of its 50 MW project in Gansu Province, China. Completion of the project is expected by the end of the third quarter of 2013. The Company continues to source project opportunities inside and outside of China. The commencement of a project is subject to a number of factors, some of which are beyond the Company's control, such as the availability of network transmission and interconnection facilities, as well as the attainment of certain project rights, including land use rights and the right to construct manufacturing facilities in the relevant locations. Conference Call The Company will host a conference call at 8:00 a.m. ET on May 29, 2013, to discuss the results for the quarter ended March 31, 2013. Joining Jifan Gao, Chairman and CEO of Trina Solar, will be Terry Wang, Chief Financial Officer, Zhiguo Zhu, Senior Vice President and President ofTrina Solar's Module Business Unit, and Kevin Zhang, Head of Investor Relations. Supplemental information will be made available on the Investors Section of Trina Solar's website at www.trinasolar.com. To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 1 (800) 884-2382. International callers should dial +1 (660) 422-4933. The conference ID for the call is 7055-7416. If you are unable to participate in the call at this time, a replay will be available on May 29 at 10:00 a.m. ET, through June 12, at 11:59 p.m. ET. To access the replay, dial 1 (855) 859-2056, international callers should dial +1 (404) 537-3406, and enter the conference ID 7055-7416. This conference call will be broadcast live over the Internet and can be accessed by all interested parties on Trina Solar's website at www.trinasolar.com. To listen to the live webcast, please go to Trina Solar's website at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live broadcast, a replay will be available shortly after the call on Trina Solar's website for 90 days. About Trina Solar Limited Trina Solar Limited (NYSE:TSL) is a global leader in photovoltaic modules, solutions and services. Founded in 1997 as a PV system integrator, Trina Solar today drives smart energy together with installers, distributors, utilities and developers worldwide. The company's industry-shaping position is based on innovation excellence, superior product quality, vertically integrated capabilities and environmental stewardship. For more information, please visit www.trinasolar.com. Safe Harbor Statement This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the Company's ability to raise additional capital to finance its activities; the effectiveness, profitability and marketability of its products; the future trading of the securities of the Company; the Company's ability to operate as a public company; the period of time for which the Company's current liquidity will enable the Company to fund its operations; general economic and business conditions; demand in various markets for solar products; the volatility of the Company's operating results and financial condition; the Company's ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the Company's filings with the Securities and Exchange Commission. 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 in which the Company operates. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, 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 such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results. Trina Solar Limited Unaudited Condensed Consolidated Statements of Operations (US dollars in thousands, except ADS and share data) For the Three Months Ended Mar. 31, Dec. 31, Mar. 31, 2013 2012 2012 Net revenues $ 260,222 $ 302,746 $ 349,880 Cost of revenues 255,798 297,112 329,619 Gross profit 4,424 5,634 20,261 Operating expenses Selling expenses 24,468 30,350 27,381 Generalandadministrativeexpenses 14,547 40,320 26,082 Researchanddevelopmentexpenses 5,475 5,392 6,685 Total operating expenses 44,490 76,062 60,148 Operating loss (40,066) (70,428) (39,887) Foreign exchange (loss) gain (20,063) 2,582 6,472 Interest expenses (14,608) (12,682) (11,511) Interest income 1,387 1,244 2,734 Gain on change in fair value of derivative 1,079 2,153 2,520 Other income, net 2,445 1,209 1,029 Loss before income taxes (69,826) (75,922) (38,643) Income tax benefit (expense) 6,085 (11,256) 8,822 Net loss (63,741) (87,178) (29,821) Incomeattributabletothenoncontrollinginterest - - - Net loss attributable to Trina Solar Limited $ (63,741) $ (87,178) $ (29,821) Loss per ADS* Basic $ (0.90) $ (1.23) $ (0.42) Diluted $ (0.90) $ (1.23) $ (0.42) Weighted average ADS outstanding* Basic 70,804,960 70,772,050 70,586,800 Diluted 70,804,960 70,772,050 70,586,800 * "ADS" refers to any of our American depository shares, each representing 50 ordinary shares. Unaudited Condensed Consolidated Statements of Comprehensive Income (US dollars in thousands) Net loss $ (63,741) $ (87,178) $ (29,821) Other comprehensive income (loss): Foreign currency translation adjustments 4,534 (877) (3,874) Comprehensive loss (59,207) (88,055) (33,695) Income attributable to non-controlling interest - - - ComprehensivelossattributabletoTrinaSolarLimited $ (59,207) $ (88,055) $ (33,695) Trina Solar Limited Unaudited Condensed Consolidated Balance Sheets (US dollars in thousands) Mar.31 Dec.31 Mar.31 2013 2012 2012 ASSETS Current assets: Cash and cash equivalents $ 703,795 $ 807,276 $ 632,488 Restricted cash 118,484 110,920 115,787 Inventories 341,597 318,504 351,036 Project assets, current portion 7,926 7,960 9,235 Accounts receivable, net 365,311 390,157 555,206 Current portion of advances to 61,966 57,846 67,196 suppliers, net Prepaid expenses and other current 92,204 72,824 106,646 assets, net Total current assets 1,691,283 1,765,487 1,837,594 Property, plant and equipment, net 872,363 893,340 944,801 Project assets, net of current portion 19,980 23,398 5,062 Land use rights, net 41,754 41,961 42,629 Advances to suppliers, net of current 76,878 86,993 123,286 portion Investment in equity affiliates 10,961 10,961 7,753 Deferred income tax assets, net 47,333 41,048 19,038 Other noncurrent assets 1,901 1,669 2,296 TOTAL ASSETS $ 2,762,453 $ 2,864,857 $ 2,982,459 LIABILITIES AND EQUITY Current liabilities: Short-term borrowings, including current $ 830,844 $ 875,821 $ 501,599 portion of long-term borrowings Accounts payable 449,745 428,626 534,045 Convertible senior notes 83,582 83,582 - Accrued expenses and other current 88,649 91,126 116,941 liabilities Total current liabilities 1,452,820 1,479,155 1,152,585 Long-term bank borrowings, excluding 395,520 415,150 518,840 current portion Convertible senior notes - - 118,006 Accrued warranty costs 68,077 65,780 62,467 Other noncurrent liabilities 22,544 22,987 16,873 Total liabilities 1,938,961 1,983,072 1,868,771 Ordinary shares 40 40 39 Additional paid-in capital 657,908 656,944 653,002 Retained earnings 151,654 215,395 452,130 Accumulated other comprehensive income 13,740 9,206 8,317 Total Trina Solar Limited shareholders' 823,342 881,585 1,113,488 equity Non-controlling interest 150 200 200 Total equity 823,492 881,785 1,113,688 TOTAL LIABILITIES AND EQUITY $ 2,762,453 $ 2,864,857 $ 2,982,459 For further information, please contact: Trina Solar Limited Brunswick Group Terry Wang, CFO Ilse Schache Phone: + (86) 519-8548-2009 Phone: + (86) 10-6566-2256 (Changzhou) Email: email@example.com Kevin Zhang, Investor Relations Phone: + (86) 519-8517-6093 (Changzhou) Email: firstname.lastname@example.org SOURCE Trina Solar Limited Website: http://www.trinasolar.com
Trina Solar Announces First Quarter 2013 Results
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