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Trina Solar Announces Second Quarter 2013 Results

              Trina Solar Announces Second Quarter 2013 Results

PR Newswire

CHANGZHOU, China, Aug. 20, 2013

CHANGZHOU, China, Aug. 20, 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 second quarter of 2013.

Second Quarter 2013 Financial and Operating Highlights

  oSolar module shipments were approximately 647 MW during the second quarter
    of 2013, representing a sequential increase of 64.6% from the first
    quarter of 2013
  oNet revenues were $440.7 million, an increase of 69.4% from the first
    quarter of 2013
  oGross profit was $51.2 million, compared to $4.4 millionin the first
    quarter of 2013
  oGross margin was 11.6%, compared to 1.7% in the first quarter of 2013
  oThe Company recorded an additional accounts receivables provision of $8.7
    million in the second quarter of 2013
  oThe Company had a charge of $9.1 million for certain assets that it ceased
    using during the second quarter of 2013
  oOperating loss was $23.9 million, compared to $40.1 million in the first
    quarter of 2013
  oOperating margin was negative 5.4%, compared to negative 15.4% in the
    first quarter of 2013
  oNet loss was $33.7 million, compared to a net loss of $63.7 million in the
    first quarter of 2013
  oLoss per fully diluted American Depositary Share ("ADS" and each ADS
    represents 50 of the Company's ordinary shares) was $0.47, compared to
    $0.90 in the first quarter  of 2013

"I am pleased to announce that we achieved record quarterly shipment numbers
in the second quarter of 2013, exceeding our original guidance by more than
100 MW," said Mr. Jifan Gao, chairman and CEO of Trina Solar. "With robust
global demand, we took full advantage of our global sales network and strong
brand to seize available commercial opportunities. In terms of pricing, the
average selling price ("ASP") of modules has stabilized, reversing the falling
trend seen in previous quarters. As a result of our on-going efforts to
improve operational efficiency and control manufacturing costs, we achieved
continuing reductions in non-silicon costs, which contributed to
quarter-on-quarter margin improvement.

"In the second quarter, there was regulatory uncertainty surrounding the
E.U.'s anti-dumping case against PV imports from China. Geographic
diversification of revenue helped to mitigate such regulatory risks. We
achieved strong sequential shipment increases in growth markets, including
China, the U.S., India and Japan, which added to our stable shipments to
Europe. We continue to monitor the latest developments in the trade case and
are encouraged by the recent solution negotiated between the E.U. and China.
We remain committed to continuing to serve our customers and business partners
in Europe, with whom we have built strong relationships.

"In terms of project development, we made good progress on the 50 MW power
plant project in Wuwei, Gansu Province, China in the second quarter.
Construction has been completed and we expect the facility to be grid
connected and commence initial electricity generation by the end of the third
quarter of 2013. For our downstream systems business, we remain focused on
research and development and committed to delivering innovative products and
solutions to lower installation costs, while enhancing the efficiencies and
ease-of-use of solar energy.

"Following the end of the second quarter, we completed the redemption of all
remaining outstanding convertible senior notes when they became due in July
2013. We continue to manage our balance sheet and liquidity position
carefully, which will ensure that we have the necessary resources to develop
downstream opportunities."

Recent Business Highlights

During the second 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.
  oAnnounced that Semiconductor Equipment and Materials International
    ("SEMI") has approved two standards submitted by Trina Solar: the
    "Specification for Packaging Protection Technology for PV Modules" (SEMI
    PV44-0513) and the "Test Method for the Content of Vinyl Acetate (VA) in
    Ethylene-vinyl Acetate (EVA) Applied in PV Modules Using Thermal
    Gravimetric Analysis (TGA)" (SEMI PV45-0513). Trina Solar is the first PV
    company in China to lead the establishment of an international SEMI
    standard.

Subsequent Events

Subsequent to the second quarter of 2013, the Company:

  oAnnounced that it has received the new International Electrotechnical
    Commission (IEC) 61730-2 standard certification with Class A Fire Safety
    from TUV Rheinland for its new frameless PDG5 module. Trina Solar is the
    first manufacturer in Asia to achieve this certification. TUV Rheinland's
    testing rated the PDG5 dual glass module to the highest level of fire
    resistance.
  oAnnounced the commercial availability of an enhanced version of its
    industry-leading Trinasmart modules, embedded with Smart Curve technology.
    Trinasmart is a module-integrated solution that optimizes the energy
    output of PV systems, enhances the safety of solar arrays, improves the
    installation speed of an array and reduces balance of system costs. The
    technology allows roof sections that are prone to shading to be utilized
    without causing power loss to the entire system, increasing output within
    one string by up to 20 percent.
  oAnnounced that it has supplied 7 MW of photovoltaic modules to Ikaros
    Solar, a leading company dedicated to the installation of green solar
    energy systems, for an agricultural project at Goose Willow Farm in the
    town of Abington in the U.K.
  oAnnounced that it had redeemed, together with all accrued but unpaid
    interest, all remaining outstanding convertible senior notes due 2013 on
    July 15, 2013. With the completion of this redemption, Trina Solar has no
    outstanding convertible debt.
  oAnnounced that it will provide 1.1 million of its 72-cell PV
    multi-crystalline modules (a total of 345 MW in DC power; equivalent to
    approximately 250 MW AC) to the Copper Mountain Solar 3 project in Boulder
    City, Nevada, USA. The project is owned and operated by Sempra U.S. Gas &
    Power and will be constructed by AMEC. The modules will start being
    shipped from Q4 2013 and the project is expected to be completed in Q1
    2015.

Second Quarter 2013 Results

Net Revenues
Net revenues in the second quarter of 2013 were $440.7 million, an increase of
69.4% sequentially and 27.4% year-over-year. Total shipments were 646.6 MW,
compared to 392.9 MW in the first quarter of 2013 and 418.8 MW in the second
quarter of 2012. The sequential increase in shipments was caused primarily by
robust global demand, which, together with the stabilizing ASP, led to an
increase in revenues.

Gross Profit and Margin
Gross profit in the second quarter of 2013 was $51.2 million, compared to a
gross profit of $4.4 million in the first quarter of 2013 and $29.0 million in
the second quarter of 2012.

Gross margin was 11.6% in the second quarter of 2013, compared to 1.7% in the
first quarter of 2013 and 8.4% in the second quarter of 2012. The sequential
increase was primarily due to the stabilization of the ASP of modules and
decreases in costs while the year-on-year increase in gross margin was
primarily due to decreases in costs that exceeded declines in the ASP of
modules.

Operating Expense, Loss and Margin
Operating expenses in the second quarter of 2013 were $75.1 million, an
increase of 68.7% sequentially and a decrease of 30.2% year-over-year. The
Company's operating expenses represented 17.0% of its second quarter net
revenues, a decrease from 17.1% in the first quarter of 2013 and 31.1% in the
second quarter of 2012. The sequential increase was primarily due to an
additional accounts receivables provision of $8.7 million in the second
quarter of 2013 compared to an accounts receivables provision reversal of
$11.1 million in the first quarter of 2013. The year-over-year decrease was
primarily due to the reduction of accounts receivables provision. Operating
expenses in the second quarter of 2013 included $1.7 million in share-based
compensation expenses, compared to $1.1 million in the first quarter of 2013
and $2.7 million in the second quarter of 2012.

As a result of the foregoing, operating loss in the second quarter of 2013 was
$23.9 million, compared to operating losses of $40.1 million in the first
quarter of 2013 and $78.6 million in the second quarter of 2012. Operating
margin was negative 5.4% in the second quarter of 2013, compared to negative
15.4% in the first quarter of 2013 and negative 22.7% in the second quarter of
2012.

Net Interest Expense
Net interest expense in the second quarter of 2013 was $11.0 million, compared
to $13.2 million in the first quarter of 2013 and $9.3 million in the second
quarter of 2012. The sequential decrease in net interest expense was primarily
due to a decrease in average bank borrowings in the second quarter of 2013.

Foreign Currency Exchange Loss
The Company had a foreign currency exchange loss of $2.2 million in the second
quarter of 2013, which included changes in fair value of derivative
instruments, compared to a net loss of $19.0 million in the first quarter of
2013 and $22.5 million in the second quarter of 2012. This net loss was
primarily due to the exchange rate fluctuation of certain foreign currencies
against the functional currencies of the Company's subsidiaries during the
second quarter of 2013, offset by gains from foreign currency hedging
contracts involving the Euro, Renminbi, British Pound, and U.S. Dollar used by
the Company to mitigate its foreign currency risk exposure.

Income Tax Benefit
Income tax benefit was $0.9 million in the second quarter of 2013, compared to
$6.1 million in the first quarter of 2013 and $16.1 million in the second
quarter of 2012. The income tax benefit in the second quarter of 2013
primarily resulted from a deferred tax benefit recognized for the net 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 $33.7 million in the second quarter
of 2013, compared to net loss of $63.7 million in the first quarter of 2013
and $92.1 million in the second quarter of 2012.

Net margin was negative 7.6% in the second quarter of 2013, compared to
negative 24.5% in the first quarter of 2013 and negative 26.6% in the second
quarter of 2012.

Loss per fully diluted ADS was $0.47 in the second quarter of 2013. The impact
of the additional accounts receivables provision was approximately $0.12 per
ADS, while the effect of the charge for fixed assets ceased to be used was
approximately $0.13 per ADS.

Financial Condition

As of June 30, 2013, the Company had $619.2 million in cash and cash
equivalents and restricted cash. Total bank borrowings were $1,120.0 million,
of which $973.0 million were short-term borrowings.The Company decreased its
long-term borrowings by $248.5 million to approximately $147.0 million as of
June 30, 2013.

During the second quarter of 2013, the Company repurchased $26.6 million of
its convertible senior notes due July 2013, which resulted in a gain of $0.3
million. Subsequent to the second quarter of 2013, the Company redeemed,
together with all accrued but unpaid interest, all remaining outstanding
convertible senior notes on July 15, 2013.

Shareholders' equity was $791.2 million as of June 30, 2013, a decrease from
$823.3 million at the end of the first quarter of 2013.

Third Quarter and Fiscal Year 2013 Guidance

During the third quarter of 2013, the Company expects to ship between 650 MW
to 680 MW of PV modules.

The Company believes its overall gross margin for the third 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 low double digits in percentage terms. Such guidance is based on the
exchange rate between the Euro and U.S. dollar as of Aug 20, 2013.

For the full year 2013, the Company revises its previous PV module shipment
guidance of between 2.0 GW and 2.1 GW to 2.3 GW and 2.4 GW.

Operations and Business Outlook

Industry Update
In a decision dated August 2, 2013, with an effective date of August 6, 2013,
the European Commission ("EC") accepted a price undertaking offered by Chinese
suppliers and their importers pursuant to which they agreed to sell an
established maximum amount of solar panels or certain related components into
the European Union ("EU") at a minimum price. In exchange, the EC will forgo
the imposition of anti-dumping duties on imports covered by the agreement. The
agreement also imposes various reporting, verification and other requirements
related to the covered imports. This past June, the EC had imposed provisional
anti-dumping duties on the covered imports. The EC's deadline to decide
whether to impose definitive anti-dumping duties is December 5, 2013. If the
EU concludes that definitive anti-dumping duties on solar panels imported from
China are not warranted, then the price undertaking agreement will terminate.
If the EC decides that definitive anti-dumping duties are warranted, solar
panels or other covered merchandise imported into the EU from China above the
annual quota amounts, or any imports determined not to conform to the
agreement's requirements, will be subject to the anti-dumping duties
established by the EC's definitive anti-dumping duty decision. This agreement
also could be used to resolve a parallel anti-subsidy investigation, which was
commenced by the EU on November 8, 2012. The EC decided not to impose
provisional measures in that case, but a definitive anti-subsidy decision is
also due by December 5, 2013. Trina Solar is a party to the anti-dumping price
undertaking agreement and has been involved in promoting dialogue and
consultation as a way to resolve the solar panel trade dispute between China
and the E.U.

Manufacturing Costs
In the second 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 relatively stable average poly-silicon spot prices in the
second quarter of 2013 compared to the first quarter of 2013, the Company
experienced similar silicon costs in its module manufacturing business
quarter-on-quarter. 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 June 30, 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 made progress on its 50 MW project in Gansu Province, China.
Construction has been completed and the facility is expected to be grid
connected and commence initial production 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 August 20, 2013, to
discuss the results for the quarter ended June 30, 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 2575-2663.

If you are unable to participate in the call at this time, a replay will be
available on August 20 at 11:30 a.m. ET, through September 3, 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 2575-2663.

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
                                   Jun.30,     Mar. 31,     Jun.30,
                                   2013          2013          2012
Net revenues                     $ 440,725     $ 260,222     $ 346,054
Cost of revenues                   389,507       255,798       317,062
Gross profit                       51,218        4,424         28,992
Operating expenses
Selling expenses                   37,279        24,468        28,937
General and administrative         33,709        14,547        72,162
expenses
Research and development           4,085         5,475         6,500
expenses
Total operating expenses           75,073        44,490        107,599
Operating loss                     (23,855)      (40,066)      (78,607)
Foreign exchange loss              (2,626)       (20,063)      (24,784)
Interest expenses                  (11,507)      (14,608)      (12,097)
Interest income                    466           1,387         2,766
Gain on change in fair value of    451           1,079         2,311
derivative
Other income, net                  2,528         2,445         2,206
Loss before income taxes           (34,543)      (69,826)      (108,205)
Income tax benefit                 893           6,085         16,103
Net loss                           (33,650)      (63,741)      (92,102)
Loss attributable to the           -             -             (5)
noncontrolling interest
Net loss attributable to Trina   $ (33,650)    $ (63,741)    $ (92,097)
Solar Limited
Loss per ADS*
Basic                            $ (0.47)      $ (0.90)      $ (1.30)
Diluted                          $ (0.47)      $ (0.90)      $ (1.30)
Weighted average ADS
outstanding*
Basic                              70,873,548    70,804,960    70,768,990
Diluted                            70,873,548    70,804,960    70,768,990
* "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)
                                   Jun.30,     Mar.31,     Jun. 30,
                                   2013          2013          2012
Net loss                         $ (33,650)    $ (63,741)    $ (92,102)
Other comprehensive (loss)
income:
Foreign currency translation       (172)         4,534         504
adjustments
Comprehensive loss                 (33,822)      (59,207)      (91,598)
 Less loss attributable to     -             -             (5)
non-controlling interest
Comprehensive loss attributable  $ (33,822)    $ (59,207)    $ (91,593)
to Trina Solar Limited



Trina Solar Limited
Unaudited Condensed Consolidated Balance Sheets
(US dollars in thousands)
                                                                          Jun. 30    Mar. 31    Jun. 30
                                                                          2013       2013       2012
ASSETS
Current assets:
                                                                          $      $       $    
Cash and cash equivalents                                                           703,795   660,335
                                                                          546,816
Restricted cash                                                           72,401     118,484    180,658
Inventories                                                               315,138    341,597    463,285
Project assets, current portion                                           52,772     7,926      104
Accounts receivable, net                                                  478,005    365,311    530,952
Current portion of advances to suppliers, net                     64,053     61,966     69,458
Prepaid expenses and other current assets, net                            136,966    92,204     125,411
Total current assets                                                      1,666,151  1,691,283  2,030,203
Property, plant and equipment, net                                        852,793    872,363    918,643
Project assets, net of current portion                                    9,616      19,980     18,978
Land use rights, net                                                      43,644     41,754     42,372
Advances to suppliers, net of current portion                             66,013     76,878     110,302
Investment in equity affiliates                                           10,963     10,961     14,628
Deferred income tax assets, net                                           50,607     47,333     23,560
Other noncurrent assets                                                   1,632      1,901      2,087
TOTAL ASSETS                                                              $      $        $   
                                                                          2,701,419  2,762,453  3,160,773
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings, including current                                 $      $       $    
 portion of long-term borrowings                                           830,844   733,722
                                                                          973,042
Accounts payable                                                          539,048    449,745    620,577
Convertible senior notes                                                  57,007     83,582     -
Accrued expenses and other current liabilities                            97,251     88,649     130,642
Total current liabilities                                                 1,666,348  1,452,820  1,484,941
Long-term bank borrowings, excluding current portion                      146,990    395,520    465,605
Convertible senior notes                                                  -          -          103,461
Accrued warranty costs                                                    71,964     68,077     65,383
Other noncurrent liabilities                                              24,736     22,544     16,585
Total liabilities                                                         1,910,038  1,938,961  2,135,975
Ordinary shares                                                           40         40         39
Additional paid-in capital                                                659,619    657,908    655,710
Retained earnings                                                         118,004    151,654    360,034
Accumulated other comprehensive income                                    13,568     13,740     8,820
Total Trina Solar Limited shareholders' equity                            791,231    823,342    1,024,603
Non-controlling interest                                                  150        150        195
Total equity                                                              791,381    823,492    1,024,798
TOTAL LIABILITIES AND EQUITY                                              $      $        $   
                                                                          2,701,419  2,762,453  3,160,773



For further information, please contact:

Trina Solar Limited                     Brunswick Group
Terry Wang, CFO                         Ilse Schache
Phone: +  (86) 519-8548-2008            Phone: + (86) 10-6566-2256
(Changzhou)                             Email: trina@brunswickgroup.com
Kevin Zhang, Investor Relations
Phone: + (86) 519-8517-6093 (Changzhou)
Email: ir@trinasolar.com

SOURCE Trina Solar Limited

Website: http://www.trinasolar.com
Website: http://markets.financialcontent.com/prnews/quote?Symbol=TSL
 
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