Delayed Yingli financials reveal 2015 net loss of $864 million, debts of $1.8bn

Debt-stalked tier-1 Chinese solar company Yingli Green Energy (Yingli Solar) finally published today its delayed full year and fourth quarter 2015 financial results, revealing a net loss year-over-year of $864 million.

Having applied at the end of April for a 15-day extension for the publication of its 2015 full year financials, today’s revelation that the company suffered huge losses last year hardly comes as a surprise.

This time last year the warning signs were already there, with the company revealing in its 2014 financials that it had substantial doubts as to its ability to "continue as a going concern". No such warnings were issued this time, but the naked figures were painful enough.

For 2015, Yingli’s net revenue reached RMB 9,965.8 million ($1,538.5 million), which was a sizable fall from the RMB 12,927.4 ($2,084 million) generated in 2014.

Module shipments also fell sharply from 3,361 MW in 2014 to just over 2.4 GW last year as the company suffered from lower utilization rates in certain locations, caused by tight cash flow that compelled Yingli to ease off the gas. Declining average selling prices (ASPs) for PV modules – particularly in China – also served to lower net revenues.

Gross profit for the firm slipped to RMB 1,187.3 million ($183.3 million) from RMB 2,238.2 million in 2014, lowering the gross margin to 11.9% – down from 17.3% a year previously. Operating expenses reached $836 million last year, which meant that they represented a massive 54.3% of Yingli’s net revenue. In 2014, operating expenses were just 19% of the company’s net revenue.

Explaining this sharp rise, the Yingli statement revealed that impairment of long-lived assets reached RMB 3.8 billion, namely on under-utilized property, plants and equipment. Smaller overheads – such as prepayments in relation to inventory purchase commitments – also added to that overall figure. A partial offset in operating expenses was generated by the sale of land and property for RMB 1.2 billion.

Net loss and debt restructuring

By the end of 2015, Yingli’s debt burden stood at $1.8 billion of outstanding borrowings and medium-term notes. Net loss for the year was RMB 5,600.5 million ($864.6 million), which was an improvement on the RMB 1,299.8 million net loss suffered in 2014. Yingli confirmed in its report that it is "exploring various potential debt restructuring options in order to improve liquidity and debt-to-equity ratio", as well as to reduce cash outflow from debt repayments – interest on debts amounted to more than $150 million last year.

The repayment of a large portion of the company’s outstanding medium-term notes last year meant that 2015 was always likely to prove challenging, Yingli chairman and CEO Liansheng Miao said, adding that 2016 is expected to be "an important year of transformation for us".

Miao focused on Yingli’s success in improving its overall utilization rate in Q4 2015, reaching 80%, and the 2.4 GW of shipments for the year. “Despite the financial challenges,” he said, “we achieved satisfactory performance in overseas markets. We achieved significant growth in Japan, where annual shipment increased by over 18% Y/Y.

The CEO added that Yingli Europe’s downstream activities have proven fruitful, growing 70% in a year, chiefly in emerging North African markets. At home, aided by supportive policies for solar in China, Yingli "will strive to continue to strengthen cooperation with our large clients such as state-owned enterprises controlled by central and local governments", Miao said.

By the end of April, Yingli had secured 700 MW of PV module orders in China.