JA Solar, the Tier-1 vertically integrated Chinese solar company, has posted strong 2016 financial results that reveal a 16% annual increase in revenue and a 25% year-on-year (YOY) growth in shipments.
The company posted net revenue for the year of RMB 15.7 billion ($2.3 billion), which was 25% up from 2015’s RMB 13.5 billion ($1.9 billion), driving operating profit of $130.1 million – a slight increase on 2015’s operating profit of $124.6 million.
However, ending the year with cash and cash equivalents of $370 million, JA Solar’s final cash balance was in a slightly poorer state than at the end of 2015 despite that 16% increase in shipments. Lower average selling prices (ASPs) in China and globally weighed on the company’s cost structure, with net income reaching RMB 719.6 million ($103.6 million) and gross margin contracting slightly to 14.6%, down from 17% in 2015. Gross profit, meanwhile, held steady at $330.3 million (compared to $330.2 million in 2015).
Nevertheless, the 5.2 GW of shipments for the year surpassed guidance, and of that figure some 4,606.6 MW of modules and 313.8 MW of cells were shipped externally, with downstream projects receiving 245.8 MW of the firm’s own modules.
By region, China accounted for 53.3% of shipments in 2016, a 10.4% increase on 2015, with the second-largest rise seen in South America, where shipments grew 9.8%. JA Solar shipped 18.3% and 6.2% fewer modules and cells to the APAC region and Europe respectively in 2016.
“Growth remains a key focus for our team and we are optimistic about our prospects in 2017 and beyond, despite increasing competition in the solar industry,” said JA Solar chairman and CEO Baofang Jin. “We still have some opportunity to improve our cost structure and manufacturing performance through efficiency initiatives, and believe our operations are positioned to benefit as market conditions improve around the world.”
Jin added that JA Solar expects its domestic Chinese market to remain solid over the first half of 2017, with this summer’s latest round of FIT cuts likely to trigger a second-half slowdown. “Nonetheless,” he stressed, “we are confident that our balanced global footprint and flexible business model will enable us to adjust to evolving market conditions.”
The fourth quarter (Q4) of 2016 saw JA Solar increase shipments 5.5% YOY and 13.8% sequentially, rising to 1.4 GW, while revenue of $574.8 million was 4.1% up on Q3 2016 but 13.1% down YOY as lower ASPs made their mark.
Q1 2017 is poised to deliver a slight fall in sequential shipments, with JA Solar guiding a range of 1.2 to 1.3 GW for the first three months of the year. However, annually the company is forecasting total shipments of 6 GW to 6.5 GW, which would represent strong growth on 2016. Of that figure, a smaller portion – just 200 to 250 MW – will be steered towards JA Solar’s downstream objectives.
On the capacity front, JA Solar says that it will increase its cell capacity from 5.5 GW at the end of 2016 to 7 GW by the end of this year, with module capacity also set to grow from 5.5 GW to 6 GW.
In November it was reported that the company had broken ground on the construction of a $1 billion solar cell factory in Vietnam, but recently news emerged that the fab’s development had been temporarily halted due to legal and environmental issues relating to the local government of the Bac Giang province in which the facility will be located.
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