China’s biggest solar cell manufacturer, JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO), has recently released its fourth quarter results in which its losses widened, despite the increase in shipments, as it suffered from a weak pricing environment. The business has been transitioning from primarily a PV cell producer to a modules manufacturer in 2012.
Total shipments in the final quarter of 2012 stood at 500MW, which is 80MW more than the high end of its previously announced guidance, and shows an increase from 418MW shipped in the previous quarter and 398MW shipped in the same quarter last year. JA Solar’s net revenues increased 1.8% sequentially and decreased by 14.2% year-over-year to $268.1M. Excluding tolling arrangements, the firm’s average selling price (ASP) was around $0.61-$0.62. The business’s gross loss dropped from $15.5M in Q3-2012, but fell from a profit of $1.5M in Q4-2011 to a loss of $12.4M in Q4-2012. It also set aside $21.5M as provision for accounts receivable and incurred asset impairment charges of $23.6M related to the 600MW of total outdated cell and module production capacity. JA Solar’s total net loss for the quarter widened by 71.74% sequentially, and 48.46% YoY to $102.3M.
After taking into account the retired capacity, the company’s total capacity stands at 1.0GW for wafer, 1.8GW for module and 2.5GW for cell. The business will maintain its current capacity throughout 2013.
Commenting on the results, JA Solar’s Chairman and CEO Baofang Jin said, “In the fourth quarter, shipments exceeded the top end of our prior guidance, largely due to a better-than-expected performance across key growth markets. The proportion of modules , including module tolling, in our overall product mix increased to 64.4% of total shipments and 70.1% of revenue by the fourth quarter.”
China is the largest market for JA Solar. In Q4, 56% of its total cell and modules were shipped to China and 24% to other markets in Asia Pacific, while only 16% were shipped to Europe. The business is heavily Asia focused and generates around 80% of its revenues from the continent. Japan and the Middle East are also two of its key growth markets. On 12th March this year, JA Solar announced that it was supplying 35MW of PV cells to Siemens AG (ADR) (NYSE:SI) for five solar projects in Israel.
For the full year, JA Solar’s shipments increased by 0.4% to 1.7 GW, but its net revenues dropped by 37.4% to $1.08B. The company swung to a gross loss of $8.7M from a profit of $74M for fiscal year 2011, as its net loss ballooned by 204.42% to $275.75M, or $1.42 per ADS. As mentioned earlier, the company is transitioning toward shipping more modules than cells. Q3-2012 was the first time when modules contributed more to the top-line than cells. In 2013, it is expecting to net 60 to 70% sales from modules. In Q1-2013, JA Solar is expecting a sequential drop in shipments to 410MW-430MW, but expects to sell 1.7GW-1.9GW for the full fiscal year 2013.
