LDK Solar Co., Ltd., a vertically integrated manufacturer of photovoltaic products, reported its unaudited financial results for the third quarter ended September 30, 2013.
All financial results are reported in U.S. dollars on a U.S. GAAP basis.
Third Quarter Highlights:
• Net sales of $156.6 million;
• Shipped 463.1 megawatts (MW) of photovoltaic products, consisting of 384.7 MW of wafers and 78.4 MW of cells and modules.
Net sales for the third quarter of fiscal 2013 were $156.6 million, compared to $114.7 million for the second quarter of fiscal 2013, and $291.5 million for the third quarter of fiscal 2012.
Gross loss for the third quarter of fiscal 2013 was $37.6 million, compared to gross loss of $53.8 million in the second quarter of 2013, and gross loss of $32.5 million for the third quarter of fiscal 2012.
Gross margin for the third quarter of fiscal 2013 was negative 24.0%, compared to negative 46.9% in the second quarter of fiscal 2013, and negative 11.2% in the third quarter of fiscal 2012.
LDK Solar's management determined that an inventory write-down and provision for firm purchase commitment of $3.2 million was required during the preparation of the third quarter 2013 financial results. As a result, gross margin and results from operations were negatively impacted in the third quarter of fiscal 2013.
Loss from operations for the third quarter of fiscal 2013 was $77.5 million, compared to loss from operations of $95.1 million for the second quarter of fiscal 2013, and loss from operations of $75.7 million for the third quarter of fiscal 2012. During the third quarter of fiscal 2013, LDK Solar’s management determined that a provision for doubtful trade receivables of $4.6 million was required in view of the deteriorating solar market which negatively affected customers.
Operating margin for the third quarter of fiscal 2013 was negative 49.5% compared to negative 82.9% in the second quarter of fiscal 2013, and negative 26.0% in the third quarter of fiscal 2012.
Income tax benefit for the third quarter of fiscal 2013 was $3.1 million, compared to income tax benefit of $4.8 million in the second quarter of fiscal 2013 and income tax benefit of $25.4 million in the third quarter of fiscal 2012.
Net loss available to LDK Solar’s shareholders for the third quarter of fiscal 2013 was $127.0 million, or a loss of $0.65 per diluted ADS, compared to net loss of $165.3 million, or a loss of $0.97 per diluted ADS for the second quarter of fiscal 2013 and net loss of $136.9 million, or a loss of $1.08 per diluted ADS for the third quarter of fiscal 2012. The weighted average number of shares for calculating diluted ADS was approximately 194.8 million for the third quarter of fiscal 2013.
LDK Solar ended the third quarter of fiscal 2013 with $95.4 million in cash and cash equivalents and $130.4 million in short-term pledged bank deposits, with substantially all of the balance of cash and cash equivalents and pledged bank deposits onshore in the accounts of LDK Solar’s subsidiaries in China.
“Our third quarter results were in line with expectations,” stated Sam Tong, President and CEO of LDK Solar. “We were pleased to deliver 37% sequential revenue growth and reduce our net loss available to LDK Solar’s shareholders both sequentially and on a year-over-year basis. We saw some signs of further improvement in the PV market during the quarter. While European PV markets remained soft, we experienced increased demand from China, North America and other emerging solar markets.”
“As announced, we recently signed a new onshore loan facility framework agreement with a syndicate of 11 commercial banks in China for a credit facility in the aggregate principal amount of RMB 1.56 billion. Although the drawdown under the facility will be subjected to various conditions, this new credit facility will support the ramp up of our onshore manufacturing operations for polysilicon, wafers, cells and modules within Jiangxi Province. We remain committed to improving our cost structure by driving down production costs, reducing operating expenses and adapting our business to the evolving demand environment,” continued Mr. Tong.
“During the quarter, we continued to pursue a number of initiatives focused on restructuring our business operations and on our liability management. While the onshore syndicate facility will alleviate some of our onshore operating cash flow pressure in Jiangxi Province, our offshore value and cash flow are insufficient to solve even our short-term liquidity associated with our offshore indebtedness. We are working closely with our stakeholders and relevant advisors to negotiate a consensual solution to our offshore debt obligations,” concluded Mr. Tong.
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 2013, LDK Solar estimates its revenue to be in the range of $200 million to $250 million, wafer shipments between 480 MW and 520 MW and cell and module shipments between 120 MW and 160 MW.