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Updated: 14-Jun-16 07:58 ET
Yingli Green Energy [YGE] Reports First Profitable Quarter Since The Third Quarter Of 2011
Yingli Green Energy (YGE 4.40) reported first quarter revenue this
morning of $364.6 million, which was down fell 22.2% year/year, but beat
expectations.
The increase in total net revenues in the first quarter of 2016 compared to the fourth quarter of 2015 was mainly due to the increase of other revenues especially the sales of PV cells and the higher average selling price of the company's PV modules compared to the fourth quarter of 2015 mainly as a result of higher proportion of shipments to Japan, where the selling price of PV modules generally is higher than that in other markets.
The appreciation of Japanese Yen against Renminbi in the first quarter of 2016 and more shipments to the U.S. with relatively higher selling price also contributed to the higher average selling price of the company's PV modules in the first quarter of 2016.
Moving down the income statement, gross profit was RMB469.3 million (US$72.8 million), significantly increased from RMB248.3 million in the fourth quarter of 2015. Gross margin was 20.0%, increased from 11.8% in the fourth quarter of 2015. Gross margin on sales of PV modules was 19.7%.
The increase in gross profit and gross margin from the fourth quarter of 2015 to the first quarter of 2016 was mainly due to the higher average selling price of the company's PV modules compared to the fourth quarter of 2015 primarily as a result of higher proportion of shipments to Japan in the first quarter of 2016, where the selling price of PV modules generally is higher than that in other markets.
On an adjusted non-GAAP basis, adjusted net income was RMB73.3 million (US$11.4 million), and adjusted income per ADS was RMB4.0 (US$0.6). Total photovoltaic module shipments were 508.1 MW, compared to 504.5MW in the fourth quarter of 2015.
The company said, "our shipments to Japan continued to increase and shipments to Japan as a percentage of our total shipments increased to approximately 40% in the first quarter of 2016 from approximately 30% in the fourth quarter of 2015. We expect the strong demand from Japan to continue in 2016 before Japan's announced reduction of subsidies for PV power becomes effective in April 2017. We also had a solid first quarter in the United States with shipments to the U.S. representing approximately 14% of our total shipments in the quarter as compared to approximately 10% in the fourth quarter of 2015, and we expect to maintain our position in the U.S. with orders from a stable base of run rate customers. In China, we have secured orders of approximately 820MW by the end of May due to robust demand in the first half of 2016."
Outlook:
Looking ahead, based on current market conditions, the company's current operating conditions, estimated production capacity and forecasted customer demand, the company expects its PV module shipments to be in the estimated range of 580MW to 620MW for the quarter ending June 30, 2016. The company also expects its gross margin in the second quarter of 2016 to be in the estimated range of 18% to 20%.
Brief profile: Yingli Green Energy Holding Company Limited, known as "Yingli Solar" or "Yingli", is one of the world's leading photovoltaic module manufacturers. Yingli Green Energy's manufacturing covers the photovoltaic value chain from ingot casting and wafering through solar cell production and PV module assembly. Headquartered in Baoding, China, Yingli Green Energy has more than 30 regional subsidiaries and branch offices and has distributed more than 15 GW solar panels to customers worldwide.
Pre-market, shares of YGE are trading 9.4% higher at $4.65/share on light volume.
The increase in total net revenues in the first quarter of 2016 compared to the fourth quarter of 2015 was mainly due to the increase of other revenues especially the sales of PV cells and the higher average selling price of the company's PV modules compared to the fourth quarter of 2015 mainly as a result of higher proportion of shipments to Japan, where the selling price of PV modules generally is higher than that in other markets.
The appreciation of Japanese Yen against Renminbi in the first quarter of 2016 and more shipments to the U.S. with relatively higher selling price also contributed to the higher average selling price of the company's PV modules in the first quarter of 2016.
Moving down the income statement, gross profit was RMB469.3 million (US$72.8 million), significantly increased from RMB248.3 million in the fourth quarter of 2015. Gross margin was 20.0%, increased from 11.8% in the fourth quarter of 2015. Gross margin on sales of PV modules was 19.7%.
The increase in gross profit and gross margin from the fourth quarter of 2015 to the first quarter of 2016 was mainly due to the higher average selling price of the company's PV modules compared to the fourth quarter of 2015 primarily as a result of higher proportion of shipments to Japan in the first quarter of 2016, where the selling price of PV modules generally is higher than that in other markets.
On an adjusted non-GAAP basis, adjusted net income was RMB73.3 million (US$11.4 million), and adjusted income per ADS was RMB4.0 (US$0.6). Total photovoltaic module shipments were 508.1 MW, compared to 504.5MW in the fourth quarter of 2015.
The company said, "our shipments to Japan continued to increase and shipments to Japan as a percentage of our total shipments increased to approximately 40% in the first quarter of 2016 from approximately 30% in the fourth quarter of 2015. We expect the strong demand from Japan to continue in 2016 before Japan's announced reduction of subsidies for PV power becomes effective in April 2017. We also had a solid first quarter in the United States with shipments to the U.S. representing approximately 14% of our total shipments in the quarter as compared to approximately 10% in the fourth quarter of 2015, and we expect to maintain our position in the U.S. with orders from a stable base of run rate customers. In China, we have secured orders of approximately 820MW by the end of May due to robust demand in the first half of 2016."
Outlook:
Looking ahead, based on current market conditions, the company's current operating conditions, estimated production capacity and forecasted customer demand, the company expects its PV module shipments to be in the estimated range of 580MW to 620MW for the quarter ending June 30, 2016. The company also expects its gross margin in the second quarter of 2016 to be in the estimated range of 18% to 20%.
Brief profile: Yingli Green Energy Holding Company Limited, known as "Yingli Solar" or "Yingli", is one of the world's leading photovoltaic module manufacturers. Yingli Green Energy's manufacturing covers the photovoltaic value chain from ingot casting and wafering through solar cell production and PV module assembly. Headquartered in Baoding, China, Yingli Green Energy has more than 30 regional subsidiaries and branch offices and has distributed more than 15 GW solar panels to customers worldwide.
Pre-market, shares of YGE are trading 9.4% higher at $4.65/share on light volume.
