North Coast Solar Stocks

November 19, 2008

LDK Solar Reports Financial Results for Third Quarter 2008

Filed under: LDK — Tags: , , , , — Jason @ 6:15 am

Wednesday November 19, 6:15 am ET

XINYU CITY, China and SUNNYVALE, Calif., Nov. 19 /PRNewswire-FirstCall/ — LDK Solar Co., Ltd. (“LDK Solar”; LDK), a leading manufacturer of multicrystalline solar wafers, today reported its unaudited financial results for the third quarter ended September 30, 2008.

All financial results are reported in U.S. dollars on a U.S. GAAP basis.

Third Quarter 2008 Financial Highlights:

— Revenue of $541.8 million, up 22.7% quarter-over-quarter;
— Annualized wafer production capacity reached 1.2 GW by end the quarter;
— Signed 14 long-term wafer supply agreements year-to-date;
— Total wafer shipments increased 31.8% to 252.7 MW during the quarter;
— Gross profit margin for the quarter was 22.7%; and
— Completed a follow-on offering of 4.8 million American depositary shares (“ADSs”), further enhancing LDK Solar’s resources for accelerated expansion plans.

Net sales for the third quarter of fiscal 2008 were $541.8 million, up 22.7% from $441.7 million for the second quarter of fiscal 2008, and up 241.4% from $158.7 million for the third quarter of fiscal 2007.

Gross profit for the third quarter of fiscal 2008 was $122.9 million, up 9.5% from $112.3 million for the second quarter of fiscal 2008, and up 151.3% from $48.9 million for the third quarter of fiscal 2007. Gross profit margin for the third quarter of fiscal 2008 was 22.7% compared to 25.4% in the second quarter of fiscal 2008 and 30.8% in the third quarter of fiscal 2007. Operating profit for the third quarter of fiscal 2008 was $107.8 million, up 7.5% from $100.3 million for the second quarter of fiscal 2008, and up 149.6% from $43.2 million for the third quarter of fiscal 2007. Operating profit margin for the third quarter of fiscal 2008 was 19.9% compared to 22.7% in the second quarter of fiscal 2008 and 27.2% in the third quarter of fiscal 2007.

Income tax expense for the third quarter of fiscal 2008 was $13.8 million, compared to income tax expense of $13.3 million in the second quarter of fiscal 2008.

Net income for the third quarter of fiscal 2008 was $88.4 million, or $0.77 per diluted ADS, compared to net income of $149.5 million, or $1.29 per diluted ADS for the second quarter of fiscal 2008.

LDK Solar ended the third quarter of fiscal 2008 with $347.8 million in cash and cash equivalents and $115.0 million in short-term pledged bank deposits.

On September 24, 2008, LDK Solar closed a follow-on offering of 4,800,000 ADSs, resulting in net proceeds of $192.4 million from the offering. As disclosed in the prospectus, LDK Solar expects to use approximately 60% of the net proceeds to fund the construction of its polysilicon manufacturing plant, approximately 30% to fund the capacity expansion of its wafer production facilities and the remaining 10% to fund other general corporate activities.

“We are pleased to deliver strong third quarter financial results as we continue to experience robust demand and significant growth of our business,” stated Xiaofeng Peng, Chairman and CEO of LDK Solar. “Total revenue this quarter was at the high end of our previously released guidance. During the quarter, we also successfully completed a secondary share offering which resulted in net proceeds of approximately $192.4 million. As a result, we believe that we are well positioned with sufficient resources to fund our current growth plans through 2009. Our market leadership position is strengthened by our accelerated execution of our wafer capacity expansion, strong wafer supply contract backlog, and our geographically diverse customer base.”

“The plant commissioning process for the 1,000 MT polysilicon plant has progressed and all stations are now fully operational. Based upon the current status of the commissioning and testing phase, we expect polysilicon output in early December 2008 and estimate 2008 production to be between 15 MT and 25 MT. We anticipate a smaller than previously expected polysilicon output in 2008 as we have committed more time to industry safety and environmental protection measures. We have made considerable progress on our construction schedule for both plants and remain confident in the timeline for the construction of our 15,000 MT polysilicon plant, where we currently expect the first 5,000 MT train to be operational at the end of first quarter or the beginning of the second quarter 2009. We remain confident that we will produce between 5,000 and 7,000 MT of polysilicon in 2009,” continued Mr. Peng.

“As we look ahead, our business will not be immune to the current global economic downturn. However, given the strength of our business model, conservative financial management, and our strong cash position, we remain confident in our long-term growth opportunities, and in our ability to succeed and to continue our role in driving the solar industry forward,” 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 fourth quarter of fiscal 2008, LDK Solar estimates its revenue to be in the range of $555 million to $565 million with wafer shipments between 260 MW to 270 MW and gross margin between 18% and 21%. By the end of fiscal 2008, LDK Solar currently expects to:

— Reach an annualized wafer production capacity of 1.4 GW; and
— Produce 15 to 25 MT of polysilicon.

For the full year of fiscal 2009, LDK Solar currently estimates:

— Revenue to be in the range of $2.9 billion to $3.1 billion;
— Wafer shipments in the range of 1.80 GW to 1.85 GW;
— Annualized wafer production capacity to be 2.3 GW by the end of 2009;
— Gross margin between 26% and 31%; and
— Production of between 5,000 and 7,000 MT of polysilicon in 2009.

Conference Call Details

The LDK Solar Third Quarter 2008 teleconference and webcast is scheduled to begin at 8:00 a.m. Eastern Time (ET), on November 19, 2008. To listen to the live conference call, please dial 800-366-7417 (within U.S.) or 303-205-0033 (outside U.S.) at 7:50 a.m. ET on November 19, 2008. An audio replay of the call will be available to investors through November 23, 2008 by dialing 800-405-2236 (within U.S.) or 303-590-3000 (outside U.S.) and entering the passcode 11122228#.

                             LDK Solar Co., Ltd.
          Unaudited Condensed Consolidated Balance Sheet Information
                 (In US$'000, except share and per share data)

                                                   9/30/2008      6/30/2008
    Assets
    Current assets
      Cash and cash equivalents                      347,762         83,742
      Pledged bank deposits                          115,028        261,934
      Trade accounts receivable, net                  40,286         34,964
      Inventories                                    702,314        656,202
      Prepayments to suppliers                       294,855        253,806
      Other current assets                            47,800         48,830
      Deferred income tax assets                       1,965          1,307
    Total current assets                           1,550,010      1,340,785
    Property, plant and equipment, net             1,138,539        705,784
    Deposits for purchases of property,
     plant and equipment                             301,252        222,400
    Intangible asset, net                              1,074          1,103
    Land use rights                                   97,818         78,946
    Inventories to be processed beyond one year        7,678         10,529
    Prepayments to suppliers expected to be
     utilized beyond one year                         22,082         20,538
    Pledged bank deposits - non-current               49,476         33,444
    Debt issuance costs, net                           9,657         10,530
    Investment in an associate                         2,579          3,196
    Deferred income tax assets                         1,052            596
    Total assets                                   3,181,217      2,427,851

    Liabilities and shareholders' equity
    Current liabilities
      Short-term bank borrowings and current
       portion of long-term bank borrowings          451,940        375,634
      Trade accounts payable                          59,165         67,003
      Advance payments from customers                342,879        242,962
      Accrued expenses and other payables            326,395        166,994
      Income tax payable                               5,023          5,293
      Other financial liabilities                        500          6,213
    Total current liabilities                      1,185,902        864,099
    Long-term bank borrowings, excluding current
     portions                                        159,465         99,158
    Convertible senior notes                         400,000        400,000
    Advance payments from customers - non-current    434,303        364,706
    Other liabilities                                  2,172          2,252
    Total liabilities                              2,181,842      1,730,215
    Shareholders' equity

    Ordinary shares: US$0.10 par value;
     499,580,000 shares authorized; 113,501,049
     and 107,228,033 shares issued as of
     September 30 and June 30, 2008, respectively;
     113,109,250 and 106,478,033 shares outstanding
     as of September 30 and June 30, 2008,
     respectively                                     11,311         10,648
    Additional paid-in capital                       441,913        238,555
    Statutory reserve                                 18,697         18,697
    Accumulated other comprehensive income            93,610         84,340
    Retained earnings                                433,844        345,396
    Total shareholders' equity                       999,375        697,636
    Total liabilities and shareholders' equity     3,181,217      2,427,851

                             LDK Solar Co., Ltd.
         Unaudited Condensed Consolidated Income Statement Information
                       (In US$'000, except per ADS data)

                                                    For the 3 Months Ended
                                                   9/30/2008      6/30/2008

    Net sales                                       541,819        441,665

    Cost of goods sold                             (418,906)      (329,372)
    Gross profit                                    122,913        112,293
    Selling expenses                                 (1,567)          (599)
    General and administrative expenses             (10,904)       (10,956)
    Research and development expenses                (2,648)          (437)
    Total operating expenses                        (15,119)       (11,992)
    Income from operations                          107,794        100,301
    Other income/(expenses):
      Interest income                                 1,872          1,698
      Interest expense and amortization
       of debt issuance costs                       (10,612)       (10,197)
      Foreign currency exchange
       (loss) / gain, net                            (1,617)         5,823
      Government subsidies                            5,431          4,347
      Change in fair value of prepaid
       forward contracts                                  -         60,028
      Others                                           (641)           856
    Earnings before income tax                      102,227        162,856
    Income tax expenses                             (13,779)       (13,322)
    Net income available to ordinary shareholders    88,448        149,534
    Net income per ADS, Diluted                       $0.77          $1.29

Source: LDK Solar Co., Ltd.

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