China’s JA Solar, a Tier-1 vertically integrated solar PV manufacturer, has today posted strong third quarter (Q3) financials that reveal both annual and sequential growth in shipments and revenue.
The company, which earlier this week was formally removed from the EU’s Minimum Import Price (MIP) undertaking, posted Q3 revenue of $624.3 million, which was 9% higher than Q3 2015 and up by 1.2% on Q2 2016.
This revenue was driven by improved external shipments of JA Solar’s PV modules, which increased 11.8% YoY and 5.8% sequentially to reach 1,200 MW. Total shipments, including solar cells, hit 1,241 MW – a 10% YoY and 0.9% sequential increase – but cell shipments actually fell to just 40.9 MW, which is down some 57% on Q2.
JA Solar’s operating profit also contracted to $18.2 million in Q3, down from $44.9 million last year and $28.2 million in Q2. This restriction can be partly attributed to the company redirecting its product sales to international markets in the third quarter after Chinese demand declined following the FIT cut in June.
Net income of $6.6 million – below both Q2’s $24.6 million and Q3 2015’s $38.8 million – was also a reflection of this strategic shift as operating expenses grew to $67.9 million, or 10.9% or revenue – above both the previous quarter and last year’s third quarter performance.
Looking ahead to the fourth quarter, JA Solar expects to ship cell and modules in the range of 1,200 to 1,300 MW, which will see the firm end the year slightly below earlier shipment forecasts: JA Solar expects 2016 shipments to be in range of 4.9 GW to 5 GW, below previous guidance of 5.2 GW to 5.5 GW.
"Third quarter results were in-line with our expectations with external shipments and revenue growing 10% and 9% year-over-year respectively," said JA Solar chairman Baofang Jin. "We executed our strategy to redirect solar product sales to several stronger international markets as shipments to the domestic market of China declined significantly after demand was pulled forward into Q2."
The chairman added that JA Solar’s downstream objectives remain on course, with 50 MW of power projects under construction and a further 150 – 200 MW planned for the coming year.
"While we anticipate more market headwinds in the near-term, we are confident that our favorable geographic exposure, prudent cost control and flexible business model will enable us to succeed,” Jin said.
As of the end of September, JA Solar had cash or cash equivalents of $298.2 million.