North Coast Solar Stocks

May 21, 2009

LDK Solar Reports Financial Results for First Quarter 2009

Filed under: LDK — Tags: , , , , , , — Jason @ 4:05 pm

Thursday May 21, 2009, 4:05 pm EDT

XINYU CITY, China and SUNNYVALE, Calif., May 21 /PRNewswire-FirstCall/ — LDK Solar Co., Ltd. (“LDK Solar”) (LDK), a leading manufacturer of multicrystalline solar wafers, today reported its unaudited financial results for the first quarter ended March 31, 2009.

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

Recent Financial Highlights:

* First quarter 2009 revenue was $283.3 million, up 21.4% year-over-year;
* Secured RMB 200 million loan from China Development Bank and received approval for RMB 1 billion credit line from Agricultural Development Bank of China;
* And shipped 206 MW of wafers, up 72.8% year-over-year.

Net sales for the first quarter of fiscal 2009 were $283.3 million, down 33.6% from $426.6 million for the fourth quarter of fiscal 2008, and up 21.4% from $233.4 million for the first quarter of fiscal 2008.

For the first quarter of fiscal 2009, gross profit was $4.9 million, compared to negative $211.4 million in the fourth quarter of fiscal 2008, and $64.6 million for the first quarter of fiscal 2008.

During the course of the preparation of LDK Solar’s 2008 annual report, LDK Solar determined that a further write-down of approximately $87.5 million to its inventories and an additional provision for doubtful recoveries of approximately $12.3 million for its prepayments to suppliers at December 31, 2008 are required to properly adjust previously announced preliminary unaudited financial results for the fourth quarter and fiscal year ended December 31, 2008. In addition, LDK Solar’s previously reported unaudited fourth quarter 2008 financial results have been revised to reflect an increase in interest expense from $8.3 million to $9.7 million in the fourth quarter of 2008 due to the adoption and retroactive application of Financial Accounting Standards Board Staff Position Accounting Principles Board 14-1 (“FSP APB 14-1”), “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)”. As a result of these, gross loss and loss from operations for fourth quarter of fiscal 2008 were adjusted accordingly.

Gross margin for the first quarter of fiscal 2009 was 1.7%, compared to negative 49.6% in the fourth quarter of fiscal 2008 and 27.7% in the first quarter of fiscal 2008.

Loss from operations for the first quarter of fiscal 2009 was $16.1 million, compared to a loss of $251.6 million for the fourth quarter of 2008, and compared to income from operations of $52.5 million for the first quarter of fiscal 2008.

Operating margin for the first quarter of fiscal 2009 was negative 5.7% compared to negative 59.0% in the fourth quarter of fiscal 2008 and 22.5% in the first quarter of fiscal 2008.

Income tax benefit for the first quarter of fiscal 2009 was $1.6 million, compared to income tax benefit of $30.5 million in the fourth quarter of fiscal 2008.

Net loss for the first quarter of fiscal 2009 was $22.5 million, or $0.21 per diluted ADS, compared to a net loss of $219.0 million, or $2.05 per diluted ADS for the fourth quarter of fiscal 2008.

LDK Solar ended the first quarter of 2009 with $184.4 million in cash and cash equivalents and $114.4 million in short-term pledged bank deposits.

“As expected, the first quarter of 2009 was characterized by a continued challenging operating environment for economies and industries globally, not precluding the solar industry,” stated Xiaofeng Peng, Chairman and CEO of LDK Solar. “During the quarter, we remained focused on positioning the company for future growth, while aligning our operations and near-term strategies to be more reflective of the current business conditions.

“Our management team demonstrated a continued focus on monitoring capital spending, enhancing cost savings and managing our cash position in the first quarter. We continue to adjust our expansion plans in order to most effectively reduce near-term capital expenditure outlays and to best align with the decrease in demand seen industry-wide. We continued to ramp polysilicon production in our 1,000 MT polysilicon plant and are pleased with the progress in the construction our 15,000 MT plant and look forward to the increasing cost savings that in-house polysilicon production will afford as our polysilicon production grows,” continued Mr. Peng.

“Additionally, we secured a loan for RMB 200 million from China Development Bank and received approval for a RMB 1 billion credit line from Agricultural Development Bank of China in April. We are proud of our ability to enhance our financial resources at a time when credit remains retracted and believe that the support from China reflects their continued commitment to fostering growth within the local solar industry.”

“We continue to be confident in our positioning within the solar industry as we believe that our lean cost structure and economies of scale are important differentiators as we pursue our long-term growth strategy,” 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 second quarter of fiscal 2009, LDK Solar estimates its wafer shipments between 200 MW to 220 MW.

Conference Call Details

The LDK Solar First Quarter 2009 teleconference and webcast is scheduled to begin at 5:00 p.m. Eastern Time (ET), on May 21, 2009. To listen to the live conference call, please dial 877-941-2069 (within U.S.) or 480-629-9713 (outside U.S.) at 4:50 p.m. ET on May 21, 2009. An audio replay of the call will be available through May 23, 2009, by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering the pass code 4069162#.

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

                                                     3/31/2009 12/31/2008
                                                     --------- ----------
     Assets
     Current assets
       Cash and cash equivalents                       184,382    255,523
       Pledged bank deposits                           114,358     83,383
       Trade accounts receivable                       187,157     94,733
       Bills receivable                                  3,291      3,075
       Inventories                                     548,812    616,901
       Prepayments to suppliers, net                   140,953     71,214
       Other current assets                            105,490     68,123
       Deferred income tax assets, net                  47,560     44,690
                                                        ------     ------
     Total current assets                            1,332,003  1,237,642
     Property, plant and equipment, net              1,968,828  1,697,203
     Deposits for purchases of property, plant
      and equipment
                                                       215,954    233,296
     Intangible asset, net                               1,001      1,037
     Land use rights                                   111,192     99,162
     Prepayments to suppliers expected to be
      utilized beyond one year, net                     32,702     33,617
     Pledged bank deposits - non-current                49,918     49,686
     Debt issuance costs, net                            7,562      8,408
     Investment in an associate                         13,582      5,630
     Deposits relating to sales and leaseback
      transactions                                       7,314      7,316
     Deferred income tax assets                            375        375
                                                           ---        ---
      Total assets                                   3,740,431  3,373,372
                                                     ---------  ---------

     Liabilities and shareholders' equity
     Current liabilities
       Short-term bank borrowings and current
        installments of long-term bank borrowings      972,294    666,200
       Bills payable                                    94,009     11,406
       Trade accounts payable                          132,618    124,066
       Advance payments from customers, current
        portion                                        267,416    256,411
       Accrued expenses and other payables             470,623    425,669
       Due to a related party                            2,193      4,359
       Income tax payable                                  883      4,299
       Other financial liabilities                      18,783     18,545
                                                        ------     ------
     Total current liabilities                       1,958,819  1,510,955
     Convertible senior notes                          400,000    400,000
     Debt discount                                     (12,875)   (14,315)
     Long-term bank borrowings, excluding
      current installments                             139,606    154,252
     Obligations under capital leases,
      excluding current installments                    35,292     40,083
     Advance payments from customers - non-current     441,866    487,577
     Other liabilities                                   3,419      3,485
     Deferred income tax liability                       2,704      1,468
                                                         -----      -----
     Total liabilities                               2,968,831  2,583,505
     Shareholders' equity
     Ordinary shares: US$0.10 par value;
      499,580,000 shares authorized;
      113,501,049 shares issued;
      113,110,516 and 113,110,396
      shares outstanding as of
      March 31, 2009 and December 31, 2008,
      respectively                                      11,311     11,311
     Additional paid-in capital                        468,541    464,101
     Statutory reserve                                  29,676     29,676
     Accumulated other comprehensive income             83,102     83,314
     Retained earnings                                 178,970    201,465
                                                       -------    -------
     Total shareholders' equity                        771,600    789,867
                                                       -------    -------
     Total liabilities and shareholders' equity      3,740,431  3,373,372
                                                     ---------  ---------

                               LDK Solar Co., Ltd.
             Unaudited Condensed Consolidated Statements of Operations
                        (In US$'000, except per ADS data)

                                                  For the 3 Months Ended
                                               ---------------------------
                                               3/31/2009        12/31/2008

     Net sales                                   283,262           426,612
     Cost of goods sold                         (278,339)         (638,030)
                                                --------          --------
     Gross profit / (loss)                         4,923          (211,418)
     Selling expenses                               (702)           (1,139)
     General and administrative expenses         (17,250)          (34,965)
     Research and development expenses            (3,106)           (4,114)
                                                  ------            ------
     Total operating expenses                    (21,058)          (40,218)
                                                 -------           -------
     Loss from operations                        (16,135)         (251,636)
     Other income/(expenses):
       Interest income                               693               979
       Interest expense and amortization of
        discount on exchange notes and
        convertible senior notes issuance costs  (11,370)           (9,662)
       Foreign currency exchange (loss) /
        gain, net                                   (508)            4,950
       Government subsidy                          3,247             5,366
       Change in fair value of prepaid forward
        contracts                                      -                 -
       Others                                        (61)              567
                                                     ---               ---
     Loss before income tax                      (24,134)         (249,436)
     Income tax benefit                            1,639            30,473
                                                   -----            ------
     Net loss attributable to ordinary
      shareholders                               (22,495)         (218,963)
                                                 -------          --------

     Net loss per ADS, Diluted                    $(0.21)           $(2.05)
                                                  ------            ------

On January 1, 2009, LDK Solar adopted FSP No. APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)” concerning convertible debt accounting. This rule requires restatement of prior periods to conform to current account.

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