JA Solar emerges relatively unscathed from Q105. June 2012 | Industry & Suppliers, Markets & Trends | By: Becky Beetz
Chinese photovoltaic module manufacturer, JA Solar has posted comparatively positive first quarter (Q1) 2012 financial results compared to many of its industry counterparts. In particular, its shipments were strong.
Exceeding its previous guidance of between 320 and 350 megawatts (MW), JA Solar managed to ship 366 MW worth of its solar products in Q1. While positive, the figure was both sequentially and annually down, from 398 MW in Q4 2011, and 451 MW in Q1 2011.
Representing vast improvement, Q1 2012 operating loss was RMB 159.1 million (US$25.3 million), compared to a huge loss of RMB 487.6 million ($77.4 million) in Q4 2011. It still paled in comparison to Q1 2011, however, which achieved an operating income of RMB 545.4 million ($86.6 million).
Q1 2012 net revenue was RMB 1.6 billion ($254.4 million), compared to RMB 1.95 billion ($309.0 million) in Q4 2011, and RMB 3.6 billion ($578.5 million) in Q1 2011. Further impacting the decline was the company’s Q1 2012 net loss which, at RMB 250.9 million ($39.8 million), was an improvement on Q4 2011 (RMB 429.6 million), but still vast compared to Q1 2011’s income of RMB 470.1 million.
Q1 2012 gross profit was RMB 33.2 million ($5.3 million), compared to RMB 9.1 million ($1.4 million) in Q4 2011, and RMB 630.3 million in Q1 2011, and gross margin was 2.1 percent, compared to gross margin of 0.5 percent in Q4 2011 and 17.3 percent in Q1 2011. Excluding the provisions for potential countervailing and anti-dumping duties, which totaled $2.9 million, gross margin would have been 3.2 percent.
Q1 2012 operating cash flow, meanwhile, was RMB 114.8 million ($18.2 million), compared to RMB 545.3 million ($86.6 million) in Q4 2011. And Q1 2012 total operating expenses were RMB 192.4 million ($30.5 million), compared with RMB 496.7 million ($78.9 million) in Q4 2011 and RMB 85.0 million ($13.5 million) in Q1 2011.
In terms of markets, JA Solar said Germany and Italy both saw strong Q1 2012 growth. In the future, the company expects Japan to become key.
Commenting on the U.S.-China trade case, CEO, Peng Fang said, "While we are disappointed by the U.S. Department of Commerce's preliminary decision on anti-dumping duties last month, since last year we have worked to ensure that JA Solar is relatively insulated from the impact of this ruling. The majority of our products sold in the U.S. market in the first quarter contained cells produced by our partners outside of mainland China.
"Therefore, our exposure to potential government tariffs is relatively small and we believe that JA Solar is significantly less exposed than our peers. We estimate that less than 10 MW of the products we shipped to the U.S. in Q1 will be subject to tariffs if the provisional ruling is ratified, and we have recorded a related provision of approximately $2.9 million in the first quarter."
In Q2 2012, JA Solar expects total cell and module shipments to be between 420 and 440 MW. Meanwhile, it said its full year guidance of shipments ranging between 1.8 and two gigawatts remains unchanged.
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