May 30, 2013 - Yingli Green Energy Holding Company Limited today announced its unaudited consolidated financial results for the quarter ended March 31, 2013.
First Quarter 2013 Consolidated Financial and Operating Summary
•Total net revenues were RMB 2,679.3 million (US$431.4 million).
•PV module shipment decreased by 6.4% from the fourth quarter of 2012.
•Overall gross profit was RMB 110.9 million (US$17.8 million), representing a gross margin of 4.1%. Gross margin for PV modules was 5.0%.
•Operating loss was RMB 324.7 million (US$52.3 million), representing an operating margin of negative 12.1%.
•Net loss was RMB 611.8 million (US$98.5 million) and loss per ordinary share and per American depositary share ("ADS") was RMB 3.91 (US$0.63). On an adjusted non-GAAP basis, net loss was RMB 607.1 million (US$97.7 million) and loss per ordinary share and per ADS was RMB 3.88 (US$0.62).
"We are pleased to conclude another quarter with higher than expected shipment volumes and improved gross margin, which we believe further strengthened our leadership position in the global PV market," commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy.
"Our strong shipment was primarily supported by the strong European and the U.S. markets and the rapid growth of demand in new markets such as Japan. Europe remained strong as a result of the pull-in demand in the first quarter and we continue to see firm demand in Europe in the second quarter. The first quarter of 2013 in the U.S. was our second best quarter ever in terms of shipment volumes and we are going to consolidate our position in all segments of the U.S. market. In this quarter, our shipment to Japan increased significantly due to the vigorous demand before the subsidy adjustment in April. We expect that returns on investments will remain attractive, which will continuously drive demand in Japan."
"The first quarter has historically been slow in China due to seasonality. However, demand picks up quickly as the construction of utility-scale projects accelerates. In addition, we are also actively positioning ourselves for the upcoming opportunities in the distributed generation segment in China. Furthermore, we have achieved important milestones in other new markets and will put more efforts in diversifying our sales geographies. Based on current market conditions and forecasted customer demand, we are confident to accomplish our full year shipment guidance of 3.2 to 3.3GW."
"In addition to expanding our market share and solidifying our market position, we stay committed to improving our profitability through strategically allocating more products to markets where prices are higher and tirelessly pursue further cost savings. At the same time, as our operating cash flow position is on track to gain improvement, we expect to continuously optimize our balance sheet," Mr. Miao concluded.
First Quarter 2013 Financial Results
Total Net Revenues
Total net revenues were RMB 2,679.3 million (US$431.4 million) in the first quarter of 2013, compared to RMB 2,902.9 million in the fourth quarter of 2012 and RMB 3,148.5 million in the first quarter of 2012. PV module shipments in the first quarter of 2013 decreased by 6.4% from the fourth quarter of 2012. The sequential decrease in net revenues was mainly due to the decreased PV module shipments, which was partially offset by the slightly improved average selling price of PV modules in this quarter.
Gross Profit (Loss) and Gross Margin
Gross profit was RMB 110.9 million (US$17.8 million) in the first quarter of 2013, compared to gross loss of RMB 247.8 million in the fourth quarter of 2012 and gross profit of RMB 245.2 million in the first quarter of 2012.
Overall gross margin was 4.1% in the first quarter of 2013, compared to overall gross margin of negative 8.5% in the fourth quarter of 2012 and overall gross margin of 7.8% in the first quarter of 2012.The sequential increase in gross margin in the first quarter of 2013 was primarily attributable to the slightly improved average selling price in this quarter, the Company's continuous efforts in reducing processing cost and a decline in the prices of raw materials.
Operating Expenses
Operating expenses were RMB 435.6 million (US$70.1 million) in the first quarter of 2013, compared to RMB 518.9 million in the fourth quarter of 2012 adjusted to exclude an impairment of long-lived assets, a provision for bad debts and a loss of disposal of certain equipment. Operating expenses were RMB 380.0 million in the first quarter of 2012. The sequential decrease in operating expenses was primarily attributable to the Company's effective cost control efforts.
Operating expenses as a percentage of total net revenues was 16.3% in the first quarter of 2013. Excluding the impairment of long-lived assets, the provision for bad debts, and the loss of disposal of certain equipment mentioned above, operating expenses as a percentage of total net revenues was 17.9% in the fourth quarter of 2012. Operating expenses as a percentage of total net revenues was 12.1% in the first quarter of 2012.
Operating Loss and Margin
Operating loss was RMB 324.7 million (US$52.3 million) in the first quarter of 2013, compared to RMB 1,130.4 million in the fourth quarter of 2012 and RMB 134.7 million in the first quarter of 2012.
Operating margin was negative 12.1% in the first quarter of 2013, compared to negative 38.9% in the fourth quarter of 2012 and negative 4.3% in the first quarter of 2012.
Interest Expense
Interest expense was RMB 221.9 million (US$35.7 million) in the first quarter of 2013, compared to RMB 209.4 million in the fourth quarter of 2012 and RMB 202.4 million in the first quarter of 2012. As of March 31, 2013, the Company had an aggregate of RMB 15.5 billion (US$2.5 billion) of bank borrowings and medium-term notes, compared to RMB 15.5 billion as of December 31, 2012. The weighted average interest rate was 6.34% in the first quarter of 2013, which slightly increased from 6.22% in the fourth quarter of 2012. The increase in interest expense was mainly due to increased weighted average interest rate in this quarter.
Foreign Currency Exchange Loss (Gain)
Foreign currency exchange loss was RMB 92.4 million (US$14.9 million) in the first quarter of 2013, compared to foreign currency exchange gain of RMB 26.7 million in the fourth quarter of 2012 and RMB 26.3 million in the first quarter of 2012. Given that the Company had a net Euro-denominated asset position, the foreign currency exchange loss was mainly due to the depreciation of the Euro against the RMB in this quarter.
Income Tax Expense (Benefit)
Income tax expense was RMB 9.8 million (US$1.6 million) in the first quarter of 2013, compared to income tax expense of RMB 5.0 million in the fourth quarter of 2012 and income tax benefit of RMB 11.4 million in the first quarter of 2012. The income tax expense in the first quarter of 2013 mainly resulted from a valuation allowance of deferred income tax assets.
Net Loss
Net loss was RMB 611.8 million (US$98.5 million) in the first quarter of 2013, compared to RMB 1,249.0 million in the fourth quarter of 2012 and RMB 283.2 million in the first quarter of 2012. Loss per ordinary share and per ADS was RMB 3.91 (US$0.63) in the first quarter of 2013, compared to RMB 7.98 in the fourth quarter of 2012 and RMB 1.82 in the first quarter of 2012.
On an adjusted non-GAAP basis, net loss was RMB 607.1 million (US$97.7 million) in the first quarter of 2013, compared to RMB 908.3 million in the fourth quarter of 2012 and RMB 239.5 million in the first quarter of 2012. Adjusted non-GAAP loss per ordinary share and per ADS was RMB 3.88 (US$0.62) in the first quarter of 2013, compared to RMB 5.80 in the fourth quarter of 2012 and RMB 1.54 in the first quarter of 2012.
Balance Sheet Analysis
As of March 31, 2013, the Company had RMB 2,821.3 million (US$454.3 million) in cash and restricted cash, compared to RMB 3,051.7 million as of December 31, 2012.
As of March 31, 2013, accounts receivable were RMB 4,174.6 million (US$672.2 million), compared to RMB 3,918.7 million as of December 31, 2012. Days sales outstanding was 140 days in the first quarter of 2013, compared to 121 days in the fourth quarter of 2012.
As of March 31, 2013, accounts payable were RMB 4,591.1 million (US$739.2 million), compared to RMB 3,680.3 million as of December 31, 2012. Days payable outstanding was 161 days in the first quarter of 2013, compared to 105 days in the fourth quarter of 2012.
As of the date of this press release, the Company had approximately RMB 4,492.0 million in unutilized short-term lines of credit and RMB 2,094.0 million committed long-term facility that can be drawn down in the near future.
Changes to Executive Officers
Yingli Green Energy announced changes to two of its executive officers. Effective immediately, Mr. Yiyu Wang will serve as the Chief Financial Officer of the Company and cease to be the Company's Chief Strategy Officer. Mr. Wang joined the Company in December 2006 as Financial Controller and was appointed as the Company's Chief Strategic Officer in 2007. Prior to joining the Company, Mr. Wang was a senior audit manager and an audit manager at the accounting firm of PricewaterhouseCoopers from 1996 to 2006.
Mr. Zongwei Li will serve as the Company's Chief Strategy Officer and will cease to be the Company's Chief Financial Officer. In his capacity as Chief Strategy Officer, Mr. Li will oversee the Company's strategic planning with a focus on customized business solutions and value-added services. Mr. Li will continue to serve as a director of the Company and will also be available for assistance during the transition period.
Business Outlook for Full Year 2013
Based on current market and operating conditions, estimated production capacity and forecasted customer demand, the Company reiterates its PV module shipment target to be in the estimated range of 3.2GW to 3.3GW for fiscal year 2013, which represents an increase of 39.4% to 43.7% compared to fiscal year 2012.