Q2 2015 Earnings Call Presentation 2015-11-26 1
Disclaimer & Safe Harbor Statement This presentation 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 facts in this presentation are forward-looking statements. These forward-looking statements are based on current expectations, assumptions, estimates and projections about the Company and the industry, and involve known and unknown risks and uncertainties, including but not limited to, the Company’s failure to maintain its listing qualification due to, among other things, volatility in the Company’s ADS price; the Company’s ability to raise additional capital or renew existing bank borrowings as they become due to finance the Company’s activities; the Company’s customers’ financial condition and creditworthiness, and their ability to settle accounts receivables; the effectiveness, profitability, and the marketability of its products; litigations and other legal proceedings, including any decisions by the US International Trade Committee and Department of Commerce on the petitions filed; the economic slowdown in China and elsewhere and its impact on the Company’s operations; demand for and selling prices of the Company’s products, execution of our strategy to expand into downstream solar power businesses, the future trading of the common stock of the Company; the ability of the Company to operate as a public company; the period of time for which its current liquidity will enable the Company to fund its operations; the Company’s ability to protect its proprietary information; general economic and business conditions; the volatility of the Company’s operating results and financial condition; the Company’s ability to attract or retain qualified senior management personnel and research and development staff; future shortage or availability of the supply of raw materials; impact on cost-competitiveness as a result of entering into long-term arrangements with raw material suppliers and other risks detailed in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the Company 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. 2
Agenda Q2 2015 Performance Overview Q2 2015 Financial Details Technology Updates 3
Q2 2015 Performance Overview Items Q2 2015 Q1 2015 Q2 2014 Shipments (MW) 184.5 191.9 184.5 ASP for Modules (US$) 0.58 0.58 0.66 Revenue (US$ million) 87.5 91.5 88.5 Gross Margin (%) 6.9% 11.3% 6.2% EPS (US$) -0.71 -0.82 -0.39 Quarterly Revenue & Shipments Quarterly Gross Profit & Gross Margin (GAAP) 4
Turkey Plant- Optimize Global Supply Chain Module Shipment remained stabilized since 2015 Turkey Plant Achieved gross margin of approximately 10.3% in Q2 2015, as compared to 10.7% in Q1 2015; Broadened local financing channels; Strengthened customer base in Turkey and surrounding markets. 5
Sales Breakdown by Geography Q4 2014 Actual Q1 2015 Actual Q2 2015 Actual US$:87.5 million US$:91.5 million US$:126.7 million US Australia ROW 1% 3% 1% Row India 2% Japan America 10% Europe 27% China 56%
Conversion Cost Roadmap Blended wafer costs in the second quarter of 2015 were US$0.20 per watt, a decrease of two cents as compared to previous quarter. Compared with previous quarter, the one cent increase in the conversion costs of cells was primarily due to the lower output for this quarter. * Note: Conversion cost refers to all manufacturing costs, excluding wafer cost 7
Q1 2015 Income Statement Q2 2015 Q1 2014 Key Income Statement Data (US$ million, except share and per share data) Sales 87.5 91.5 Cost of goods sold (81.4) (81.1) Gross margin% 6.9% 11.3% R&D (0.9) (0.7) General & administrative expense (8.5) (1.4) Selling & marketing expense (4.2) (2.7) Total operating expense (13.9) (4.8) (Loss) from operations (7.8) 5.5 Interest expense (5.7) (6.3) (Loss) before income tax (10.4) (13.7) Income tax benefit (expense) (0.1) (0.8) Net (loss) attributbale to ordinary shareholder (10.5) (12.2) Weighted average ADS outstanding (diluted) 14,849,292 14,849,292 Net (loss) per ADS (diluted) (0.71) (0.82) 8
Q1 2015 Balance Sheet Q2 2015 Q1 2015 Key Balance Sheet Data (US$ in million) 38.5 32.4 Cash and cash equivalents 110.0 147.4 Restricted cash 64.6 61.0 Accounts receivable (net) 85.9 80.4 Inventory 54.0 - Project asset 214.9 261.9 Net PP&E 683.2 697.1 Total asset 147.9 122.0 Accounts payable 310.6 341.4 Short-term loans 271.2 272.1 Long-term debt 9
Technology Updates Cell Average Efficiency Roadmap PID free: -1000V, -1500V, double 85, water film Average power output : 270W/60 pc Unique structural design: effectively decreases power loss Achieved conversion efficiency of 19.8% in year-end 2015 QSAR II Batch Average Efficiency Certification: passed Ammonia resistance and salt spray tests, 7200p mechanical load High-efficiency Enhanced R&D Capability Superior features: suitable for severe multi-crystalline cell environment, less breakage during Complete the test for the equipment of producing PERC solar transportation cells and enter the phase of commercial production Applying the latest 5BB pattern design; Trademarked, patented in China and PERC solar cell has average production efficiency above 20% applying for global patents Achieved year-end conversion efficiency target of 18.5% 10
China Sunergy Co., Ltd E-mail: IR@chinasunergy.com 11 http://www.csun-solar.com
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