Trina’s 1Q13 financial results evaluation: Europe remains the key market

published: 2013-06-27 13:52 | editor: | category: Analysis
Trina announced its 1Q13 financial results on May 20th, 2013. The financial results indicated that the sales revenue in this quarter was $260 million, which decreased by 14% compared with that in 4Q12 and decreased by 26% compared with that in 1Q12. It showed that sales revenue went downward compared with either the sales revenue in the same quarter last year or in the previous quarter. Although 1Q13’s gross margin reached $4.42million, the overall gross margin was not enough to pay for the operational cost. In addition, 1Q13’s net loss was $63.74million. While operating margin remained -15.4%, but it significantly decreased compared with that in 4Q12 and it’s expected to reduce loss quarter by quarter this year.
 
Trina’s current ratio in 1Q13 was 1.16, which maintained a ratio above 1. The performance’s relatively outstanding in the current China’s PV industry and it proved that Trina has the solvency ability to pay for the debts in the short run. In July, 2013, the company will have partial convertible notes that’s about to be due. However, Trina shouldn’t have any problems under its complete financial condition.
 
Trina’s shipment quantity in 1Q13 was 392.6MW, which fell within the estimated range of 390-400MW and decreased by 5.3% compared with that in 4Q12. In terms of sales revenue, the proportion of China’s sales among the overall sales in 1Q13 significantly reduced from 32.4% in 4Q12 to 4.6%. The proportion of Germany’s sales among the overall sales rose from previous quarter’s 12.9% to 24.6% and that of UK’s sales among the overall sales increased from previous quarter’s 4.6% to 22.9%. To look into Q2, Trina indicated that Europe’s sales revenue will account for about 40% in the total revenue. Based on the understanding, the European Commission has confirmed on June 4th that they will start to impose a temporary tariff of 11.8% on China’s PV wafers, cells and modules since June 6th. If China and Europe hasn’t compromised by August 6th, the tax rate will be increased to an average tax rate of 47.6%. The final result on the anti-dumping tariff may affect Trina’s shipment in the second quarter. Trina’s shipment in 2Q13 is expected to increase significantly due to early shipment before July. Judging from company’s forecast on the shipment regions in the entire 2013, shipment to Europe and USA is likely to decrease compared with that in 4Q12. However, shipment to emerging markets and fast-growing markets will increase significantly. Last but not least, Trina in Japan and India also show strong growing strength. 
 
Trina 1Q13 sales revenue breakdown by regions:
 
Source:Trina
 
Trina’s capacity has remained the same from 2Q12 to 1Q13 with the capacity of modules and PV cells being 2400MW, respectively, and that of silicon wafers being 1200MW. However, Trina’s capacity in 2Q13 is likely to increase with the capacity of modules and PV cells increase 100MW, respectively, and that of silicon wafers slightly increase 50MW.
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