LDK Solar Reports Financial Results for the Second Quarter 2008
Aug 11,2008
Xinyu City, China and Sunnyvale, California, August 11, 2008 – LDK Solar Co., Ltd. (NYSE: LDK), a leading manufacturer of solar wafers, today reported its unaudited financial results for the second quarter ended June 30, 2008.
All financial results are reported in U.S. dollars on a U.S. GAAP basis.
Second Quarter 2008 Financial Highlights:
- Revenue of $441.7 million, up 89.2% quarter-over-quarter;
- Annualized wafer production capacity reached 880 MW by end of June;
- Signed nine long-term wafer supply agreements year-to-date;
- Total wafer shipments increased 60.8% to 191.7 MW during the quarter; and
- Gross profit margin for the quarter was 25.4%.
Net sales for the second quarter of fiscal 2008 were $441.7 million, up 89.2% from $233.4 million for the first quarter of fiscal 2008, and up 345.9% year-over-year from $99.1 million for the second quarter of fiscal 2007.
Gross profit for the second quarter of fiscal 2008 was $112.3 million, up 73.9% from $64.6 million for the first quarter of fiscal 2008, and up 221.8% year-over-year from $34.9 million for the second quarter of fiscal 2007. Gross profit margin for the second quarter of fiscal 2008 was 25.4% compared with 27.7% in the first quarter of fiscal 2008 and 35.2% in the second quarter of fiscal 2007. Operating profit for the second quarter of fiscal 2008 was $100.3 million, up 90.9% from $52.5 million for the first quarter of fiscal 2008, and up 225.4% year-over-year from $30.8 million for the second quarter of fiscal 2007. Operating profit margin for the second quarter of fiscal 2008 was 22.7% compared with 22.5% in the first quarter of fiscal 2008 and 31.1% in the second quarter of fiscal 2007.
Income tax expense for the second quarter of fiscal 2008 was $13.3 million. One of our operating subsidiaries in the PRC, after the first two years of exemptions, is now subject to the tax rate of 12.5% under the PRC Enterprise Income Tax Law that became effective on January 1, 2008.
Net income for the second quarter of fiscal 2008 was $149.5 million, or $1.29 per diluted ADS, compared to net income of $49.8 million, or $0.45 per diluted ADS for the first quarter of fiscal 2008.
LDK Solar ended the second quarter of fiscal 2008 with $83.7 million in cash and cash equivalents and with $261.9 million in pledged bank deposits.
“We experienced substantial revenue growth during the second quarter as our wafer capacity expansion exceeded our expectations,” stated Xiaofeng Peng, Chairman and CEO of LDK Solar. “We were also pleased to introduce our first Nova wafers using Upgraded Metallurgical Silicon (UMG), which began shipping to certain customers, ahead of schedule during the quarter. Customer demand remains strong and we have signed nine long-term wafer supply agreements year-to-date, further diversifying our customer base. In response to our sales backlog, we are again raising our target annualized capacity to 1.2 GW by the end of 2008, 2.2 GW by the end of 2009 and 3.2 GW by the end of 2010.”
“We are pleased with our continued success of executing our growth strategies. In addition to our wafer capacity expansion, tremendous progress has been made to date on the construction of our polysilicon plants and the project remains on schedule,” concluded Mr. Peng.
Business Outlook
The following statements are based upon management’s current expectations. These statements are forward-looking in nature, and the actual results may differ materially. You should read the “Safe Harbor Statement” below with respect to the risks and uncertainties relating to these forward-looking statements.
For the third quarter of fiscal 2008, LDK Solar estimates its revenue to be in the range of $486 million to $496 million with wafer shipments between 210 MW to 220 MW. LDK Solar also updated its outlook for the full year of fiscal 2008. For the full year of fiscal 2008, LDK Solar currently estimates:
- Revenue to be in the range of $1.65 billion to $1.75 billion;
- Wafer shipments in the range of 750 MW to 770 MW;
- Gross margin in the range of 23% to 28%; and
- Annualized wafer production capacity to be 1.2 GW by the end of 2008.
Conference Call Details
The LDK Solar Second Quarter 2008 teleconference and webcast is scheduled to begin at 5:00 p.m. Eastern Time (ET), on Monday, August 11, 2008. To listen to the live conference call, please dial 800-366-3908 (within U.S.) or 303-205-0033 (outside U.S.) at 4:50 p.m. ET on August 11, 2008. An audio replay of the call will be available to investors through August 14, 2008, by dialing 800-405-2236 (within U.S.) or 303-590-3000 (outside U.S.) and entering the passcode 11117794#.
LDK Solar Co., Ltd.
Unaudited Condensed Consolidated Balance Sheet Information
(In US$’000, except share and per share data)
|
6/30/2008 |
|
3/31/2008 |
Assets |
|||
Current assets |
|||
-Cash and cash equivalents |
83,742 |
|
93,705 |
-Pledged bank deposits |
261,934 |
|
142,086 |
-Trade accounts receivable, net |
34,964 |
|
8,905 |
-Inventories, net |
656,202 |
|
519,594 |
-Prepayments to suppliers |
253,806 |
|
206,330 |
-Other current assets |
48,830 |
|
39,187 |
-Deferred income tax assets |
1,307 |
|
658 |
Total current assets |
1,340,785 |
|
1,010,465 |
Property, plant and equipment, net |
705,784 |
|
501,078 |
Deposit for property, plant and equipments |
222,400 |
|
200,725 |
Intangible asset, net |
1,103 |
|
1,109 |
Land use rights |
78,946 |
|
64,612 |
Inventories to be processed beyond one year, net |
10,529 |
|
21,401 |
Prepayments to suppliers to be utilized beyond one year |
20,538 |
|
20,534 |
| Pledged bank deposits-non-current | 33,444 |
30,020 |
|
| Convertible senior notes issuance cost | 10,530 | ||
Other financial assets |
3,196 |
|
2,794 |
Deferred income tax assets |
596 |
|
368 |
Total assets |
2,427,851 |
|
1,853,106 |
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
Current liabilities |
|
|
|
-Short-term bank borrowings |
375,634 |
|
313,933 |
-Trade accounts payable |
67,003 |
|
37,465 |
-Advance payments from customers |
242,962 |
|
231,089 |
-Accrued expenses and other payables |
166,994 |
|
137,525 |
| -Income tax payable | 5,293 |
4,466 |
|
-Other financial liabilities |
6,213 |
|
7,577 |
Total current liabilities |
864,099 |
|
732,055 |
Long-term bank borrowings, excluding current portions |
99,158 |
|
37,795 |
| Convertible senior notes | 400,000 | ||
Advance payments from customers – noncurrent |
364,706 |
|
301,313 |
Other liabilities |
2,252 |
|
2,164 |
Total liabilities |
1,730,215 |
|
1,073,327 |
Shareholders’ equity |
|||
|
|
|
|
Ordinary shares: US$0.10 par value; 499,580,000 shares authorized; 106,478,033 shares issued and outstanding as of June 30, 2008 and March 31, 2008 |
10,648 |
|
10,648 |
Additional paid-in capital |
238,555 |
|
494,358 |
Statutory reserve |
18,697 |
|
18,697 |
Accumulated other comprehensive income |
84,340 |
|
60,214 |
Retained earnings |
345,396 |
|
195,862 |
Total shareholders’ equity |
697,636 |
|
779,779 |
Total liabilities and shareholders’ equity |
2,427,851 |
|
1,853,106 |
LDK Solar Co., Ltd.
Unaudited Condensed Consolidated Income Statement Information
(In US$’000, except per ADS data)
| For the 3 Months Ended | ||
|
6/30/2008 |
3/31/2008 |
Net sales |
441,665 |
233,399 |
Cost of goods sold |
(329,372) |
(168,831) |
Gross profit |
112,293 |
64,568 |
Selling expenses |
(599) |
(481) |
General and administrative expenses |
(10,956) |
(11,185) |
Research and development expenses |
(437) |
(371) |
Total operating expenses |
(11,992) |
(12,037) |
Income from operations |
100,301 |
52,531 |
Other income/(expenses): |
|
|
-Interest income |
1,698 |
1,326 |
-Interest expense |
(10,197) |
(5,254) |
-Foreign currency exchange gain/(loss), net |
5,823 |
5,339 |
-Government subsidy |
4,347 |
4,521 |
-Change in fair value of prepaid forward contracts |
60,028 | |
-Others |
856 | (126) |
Income before income tax |
162,856 |
58,337 |
Income tax(expenses)/ benefit |
(13,322) |
(8,511) |
Net income available to ordinary shareholders |
149,534 |
49,826 |
Net income per ADS, Diluted |
$1.29 |
$ 0.45 |
About LDK Solar
LDK Solar Co., Ltd. is a leading manufacturer of solar wafers, which are the principal raw material used to produce solar cells. LDK Solar sells wafers globally to manufacturers of photovoltaic products, including solar cells and solar modules. In addition, LDK Solar provides wafer processing services to solar cell and module manufacturers. LDK Solar’s headquarters and manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province in the People’s Republic of China. Its office in the United States is located in Sunnyvale, California.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, LDK Solar’s ability to raise additional capital to finance its activities; the effectiveness, profitability, and marketability of its products; the future trading of its securities; its ability to operate as a public company; the period of time for which its current liquidity will enable it to fund its operations; its ability to protect its proprietary information; general economic and business conditions; the volatility of its operating results and financial condition; its ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in LDK Solar’s filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about LDK Solar and the industry. These statements are based upon information available to LDK Solar’s management as of the date hereof. Actual results may differ materially from the anticipated results because of certain risks and uncertainties. This press release also contains forward looking statements about the progress of LDK Solar’s construction of its polysilicon plant. These statements are based on information available to its management today. Actual results may differ, including various factors which may delay or disrupt the plant’s construction and completion, including, poor weather, the risk of labor difficulties, construction difficulties or financing difficulties.
LDK Solar undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although LDK Solar believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
For more information contact:
Lisa Laukkanen
The Blueshirt Group for LDK Solar
lisa@blueshirtgroup.com
+1-415-217-4967
Jack Lai
Executive VP and CFO
LDK Solar Co., Ltd.
IR@ldksolar.com
+1- 408-245-8801