JA Solar also posts net loss; decreases FY shipment guidance

Due to "uncertainty" in the U.S. on the back of the ongoing trade dispute and "shifting dynamics" in the European solar markets, JA Solar’s outlook is said to be cautious going forward.

Overall, it expects to ship between 350 and 370 MW of photovoltaic cells and modules in Q3, and 1.5 to 1.8 GW for the full year, down from the originally planned 1.8 to 2 GW. "The revised estimates reflect the Company’s prioritization of maintaining a healthy financial position over short-term shipment gains," it said in a statement released.

Looking at its financials, the Chinese module manufacturer saw a hefty net loss in Q2 2012 of RMB 457.8 million (US$72.1 million), compared to RMB 250.9 million in Q1 2012, and RMB 228.9 million in Q2 2011. The latest results are said to include a foreign exchange loss of RMB 69.8 million ($11 million) and tax expenses of RMB 120 million ($18.9 million).

Meanwhile, Q2 loss per diluted ADS was RMB 2.34 ($0.37), compared with loss per diluted ADS of RMB 1.28 in the Q1 2012 and RMB 1.39 in Q2 2011.

While Q2 2012 net revenues increased to RMB 1.8 billion ($284.4 million), from RMB 1.6 billion in Q1 2012, they decreased 32.3% from RMB 2.7 billion in Q2 2011.

Gross profit, on the other hand, saw a marked increase, from a loss of RMB 72 million in Q2 2011, and a profit of RMB 33.2 million in Q1 2012, to a profit of RMB 86.1 million ($13.6 million) in Q2 2012. This attributed to a gross margin of 4.8%, compared with 2.1% in Q1 2012, and negative 2.7% in Q2 2011.

Q2 2012 operating expenses grew, to reach RMB 242 million ($38.1 million), compared with RMB 192.4 million in Q1 2012, and RMB 130 million in Q2 2011. "The increase in total operating expenses quarter over quarter was primarily due to a prepayment impairment of RMB 21.3 million ($3.4 million) and an increase in freight costs and other export-related expenses of RMB 23.1 million ($3.6 million)," said JA Solar.

This led to an operating loss of RMB 155.9 million ($24.5 million) in Q2 2012, compared with a loss of RMB 159.1 million in Q1 2012, and RMB 202 million in Q2 2011, and an operating margin of negative 8.6%, compared to negative 9.9% and negative 7.6%, respectively.

JA Solar saw its Q2 2012 module and cell shipments increase, from 366 MW in Q1 2012, and 401 MW in Q2 2011, to reach 418 MW. "This quarter, modules accounted for more than 60% of revenues and more than 55% of shipments for the first time in our history," said CEO Peng Fang.

He added, "In Europe, JA Solar is benefiting from the continued strength of the German market, and the growth in installation activity in new markets like the United Kingdom. We continue to work with our overseas manufacturing partners to supply the United States, but remain cautious given the lack of clarity about the impact of potential tariffs." Canada and Japan are also said to be promising markets.

Despite having revised the company’s FY guidance, Fang remains optimistic about the future. "Our robust balance sheet, expansion in key growth markets, close partnerships, and strong customer demand for our modules and cells underline our conviction that JA Solar will be a long-term industry winner."