SEOUL, South Korea, August 27, 2015 /PRNewswire/ -- Hanwha Q CELLS Co., Ltd. ("Hanwha Q CELLS" or the "Company") (Nasdaq: HQCL), one of the world's largest photovoltaic manufacturer of high-quality, high-efficiency solar modules, today reported its unaudited financial results for the three months ended June 30, 2015. The Company will host a conference call to discuss the results at 8:00 am Eastern Time (9:00 pm Seoul Time) on August 27, 2015. A slide presentation with details of the results will also be available on the Company's website prior to the call.
HIGHLIGHTS
Mr. Seong-woo Nam, Chairman and CEO of Hanwha Q CELLS commented, "The second quarter was the first full quarter reflecting the merger with Q CELLS in February of this year. In particular, shipment volumes were higher and growing, gross margins are expanding, our product quality is much improved, and our manufacturing scale and efficient production contributed to further reductions in our cost structure. Our ability to ship modules duty free to the US from plants in Malaysia and Korea greatly enhances our competitive position in that market, which now represents more than a third of our total shipments. We expect our US presence to improve further as we will begin to ship modules to NextEra to fulfill the 1.5 GW contract. Pricing remains higher in the US than other markets, so a bigger presence there will improve our profitability going forward."
Mr. Nam continued, "We remain on track to expand to 4.3 GW in both cell and module nameplate capacity by year end, making us one of the largest solar manufacturers in the world. Our fully-automated production facilities continue to enhance product quality and reduce costs. Our target of reaching fully optimized module manufacturing costs of low $0.40/W by year end is in sight and achievable."
"The company's downstream focus has begun to materialize with over 53 MW of solar projects grid-connected in the U.K. during the quarter. We currently hold these projects on our balance sheet and we are in an advanced discussion with strategic buyers for the sales of these operating assets. We expect to sell approximately 150 MW of operating assets in the U.K., Chile and Turkey during the 2H15. Project sales will be accretive to our earnings and will also provide additional liquidity near-term to assist in managing our financial leverage going forward."
Chairman Nam concluded by noting, "The outlook for the second half of 2015 remains robust. Visibility of orders is high and we will operate production facilities at full utilization in order to achieve our FY2015 shipment target of over 3.2 GW. ASP's should begin to stabilize for us, supported by a growing of our business in the US at healthier pricing. Our ability to further achieve benefits from the Q CELLS merger such as reduced operating expenses, supply chain synergies, and higher-quality, higher-efficiency products, all contribute to our confidence in achieving improved profitability for the remainder of this year."
SECOND QUARTER 2015 RESULTS
NOTE: Financial results discussed below and presented in financial statements include the legacy public company Hanwha SolarOne results from February 2015 due to timing of the acquisition closing.
Net Revenues
External Module Shipments |
Q2 2015 |
Q1 2015 |
||
US$M |
% |
US$M |
% |
|
North America |
121.5 |
37 |
60.4 |
20 |
Japan |
70.3 |
21 |
72.5 |
24 |
EMEA |
24.9 |
8 |
102.7 |
34 |
China |
26.4 |
8 |
18.1 |
6 |
ROW |
87.9 |
26 |
48.4 |
16 |
Total |
331.0 |
100 |
302.2 |
100 |
Gross Profit and Margin
Operating Expense, Income and Margin
Net Interest Expense
Changes in Fair Value of Derivative Contracts
Income Tax Expense
Net Income and Earnings per ADS
FINANCIAL POSITION
As of June 30, 2015, the Company had cash and cash equivalents of US$475.9 million. Total short-term bank borrowings (including the current portion of long-term bank borrowings) were US$456.5 million as of June 30, 2015. As of June 30, 2015, the Company had total long-term debt (net of current portion and long-term notes) of US$619 million. The Company's long-term bank borrowings are to be repaid in installments until their maturities, which range from one to three years. The Company's long-term notes are to be repaid within one year, and therefore the notes were classified as current liabilities as of June 30, 2015.
Net cash provided by operating activities in 2Q15 was US$423.5 million. As of June 30, 2015, accounts receivable were US$304.6 million. Day's sales outstanding ("DSO") were 83 days in 2Q15. As of June 30, 2015, inventories totaled US$444.6 million. Day's inventory was 138 days in 2Q15.
Capital expenditures were US$40.7 million in 2Q15.
CAPACITY STATUS
As of June 30, 2015, the Company had in-house production capacities of 1.3 GW for ingot, 900 MW for wafer, 3.4 GW for cell and 2.1 GW for module. The Company currently plans to expand its nameplate cell and module capacities to 4.3 GW and 4.3 GW respectively by the end of 2015. 600 MW of the aforementioned new cell capacity is from the production facility operated by Hanwha Q CELLS Korea, an affiliate of Hanwha Q CELLS Co, Ltd.
BUSINESS OUTLOOK
The Company provides the following guidance based on current operating trends and market conditions.
For the third quarter 2015, the Company expects:
For the full year 2015, the Company expects:
SAFE HARBOR STATEMENT
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends, "plans," "believes," "estimates" and similar statements. Among other things, the quotations from management in this press release and the Company's operations and business outlook, contain forward-looking statements. These forward-looking statements also include 3Q15, 2H15, and full-year 2015 estimates for PV product shipments, production capacities and other results of operations. Forward-looking statements involve inherent risks and uncertainties and actual results may differ materially from such estimates depending on future events and other changes in business climate and market conditions. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. Except as required by law, the Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Conference Call
The Company will host a conference call to discuss the results at 8:00 am Eastern Time (9:00 pm Seoul Time) on August 27, 2015. Mr. Seong-woo Nam, Chairman and CEO; Mr. Jay SEO, Chief Financial Officer; Mr. Andy Park, Vice President of Corporate Planning; Mr. Paul Combs, Vice President of Investor Relations; and Mr. Sean Park, Senior Director of Strategic Planning/IR, will discuss the results and take questions following the prepared remarks.
The dial-in details for the live conference call are as follows:
-International Toll Dial-In Number |
+65 67135090 |
-China, Domestic |
4006208038 |
-China, Domestic |
8008190121 |
-United States Toll Free |
18665194004 |
-Germany Toll Free |
08001820671 |
-South Korea Toll Free |
00308132266 |
Passcode: HQCL |
A live webcast of the conference call will be available on the investor relations section of the Company's website at: www.hanwha-qcells.com. A replay of the webcast will be available for one month.
A telephone replay of the call will be available for seven days after the conclusion of the conference call. The dial-in details for the replay are as follows:
-International Toll Dial-In Number |
+61 2 8199 0299 |
-Toll free China, Domestic |
4006322162 |
-Toll Free United States |
18554525696 |
-Toll Free Germany |
08001802149 |
-Toll Free South Korea |
0079861361602 |
Conference ID 10913421
Replay time period: August 27, 2015 11:00 AM ET - September 4, 2015 9:59 AM ET
About Hanwha Q CELLS
In February 2015 Hanwha Q CELLS Co., Ltd. (NASDAQ:HQCL) emerged as a new global solar power leader from combining two of the worlds most recognized photovoltaic manufacturers, Hanwha SolarOne and Hanwha Q CELLS. The combined company is listed on NASDAQ under the trading symbol of HQCL. It is headquartered in Seoul, South Korea, (Global Executive Headquarters) and Thalheim, Germany (Technology & Innovation Headquarters) and is the world's largest solar cell manufacturer as well as one of the largest photovoltaic module manufacturers. Due to its diverse international footprint including facilities in China, Malaysia, and South Korea, Hanwha Q CELLS is in a unique position to flexibly address all global markets, even ones with import tariffs, such as the United States and the European Union. Based on its well respected "Engineered in Germany" technology, innovation and quality, Hanwha Q CELLS offers the full spectrum of photovoltaic products, applications and solutions, from modules to kits to systems to large scale solar power plants. Through its growing global business network spanning Europe, North America, Asia, South America, Africa and the Middle East, the company provides excellent services and long-term partnership to its customers in the utility, commercial, government and residential markets. Hanwha Q CELLS is a flagship company of Hanwha Group, a FORTUNE Global 500 firm and a Top-Ten business enterprise in South Korea. For more information, visit: http://investors.hanwha-qcells.com
For further information contact:
Hanwha Q CELLS Co., Ltd.
Investor Contact:
Paul Combs
V.P. Investor Relations
86 Cheonggyecheon-ro
Jung-gu, Seoul, Korea
Tel: +86 21 3852 1533 / Mobile: +86 138 1612 2768
E-mail: paul.combs@hanwha-qcells.com
-tables to follow-
Hanwha Q CELLS Co., Ltd. |
||||||
Interim Condensed Consolidated Balance Sheets |
||||||
(in millions of US dollars, except share data) |
||||||
June 30, |
March 31, |
December 31, |
||||
ASSETS |
(unaudited) |
(unaudited) |
||||
Current assets |
||||||
Cash and cash equivalents |
475.9 |
194.5 |
156.7 |
|||
Restricted cash |
149.1 |
123.2 |
2.4 |
|||
Trade accounts receivable |
304.6 |
308.5 |
31.0 |
|||
Receivables from related parties |
294.5 |
198.6 |
159.5 |
|||
Inventories |
444.6 |
402.4 |
204.4 |
|||
Loans to related parties |
45.5 |
15.2 |
9.1 |
|||
Derivative contracts |
6.3 |
7.6 |
0.8 |
|||
Other current assets |
119.2 |
101.3 |
21.0 |
|||
Total current assets |
1,839.7 |
1,351.3 |
584.9 |
|||
Long-term prepayments |
3.3 |
7.3 |
- |
|||
Property, plant and equipment - net |
814.4 |
768.1 |
147.8 |
|||
Intangible assets |
16.0 |
16.1 |
13.7 |
|||
Land use right - net |
55.0 |
55.3 |
- |
|||
Deferred income taxes |
6.2 |
5.8 |
3.6 |
|||
Other long-term assets |
7.9 |
19.3 |
16.4 |
|||
Total assets |
2,742.5 |
2,223.2 |
766.4 |
|||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||
Current liabilities |
||||||
Trade accounts payable |
262.2 |
242.7 |
50.8 |
|||
Notes payable |
127.0 |
101.8 |
- |
|||
Payables to related parties |
346.6 |
256.3 |
87.1 |
|||
Deferred revenue |
442.2 |
- |
- |
|||
Accrued expenses |
35.5 |
30.5 |
1.1 |
|||
Other payables |
17.9 |
14.8 |
8.9 |
|||
Short-term debt |
292.4 |
235.1 |
1.1 |
|||
Current portion of long-term debt |
164.1 |
266.0 |
1.2 |
|||
Current portion of obligations under capital leases |
3.8 |
4.5 |
5.7 |
|||
Customer deposits |
3.7 |
7.7 |
1.4 |
|||
Unrecognized tax benefit |
18.7 |
18.7 |
- |
|||
Derivative contracts |
0.5 |
0.9 |
- |
|||
Litigation accruals |
73.1 |
82.4 |
58.5 |
|||
Deferred income taxes |
9.4 |
9.0 |
5.4 |
|||
Warranty provision |
37.3 |
38.0 |
10.5 |
|||
Other current liabilities |
1.8 |
1.7 |
3.3 |
|||
Total current liabilities |
1,836.2 |
1,310.1 |
235.0 |
|||
Long-term debt, net of current portion |
619.1 |
611.8 |
283.5 |
|||
Long-term obligations under capital leases |
0.1 |
0.5 |
1.2 |
|||
Long-term warranty provision |
16.2 |
15.7 |
17.0 |
|||
Deferred income taxes |
3.8 |
4.2 |
- |
|||
Total liabilities |
2,475.4 |
1,942.3 |
536.7 |
|||
Redeemable ordinary shares |
- |
- |
- |
|||
Stockholders' Equity |
||||||
Ordinary shares |
0.4 |
0.4 |
0.4 |
|||
Additional paid-in capital |
430.9 |
430.6 |
329.8 |
|||
Accumulated deficit |
(98.6) |
(84.4) |
(64.0) |
|||
Accumulated other comprehensive loss |
(65.6) |
(65.7) |
(36.5) |
|||
Total stockholders' equity |
267.1 |
280.9 |
229.7 |
|||
Total liabilities, redeemable ordinary shares and stockholders' equity |
2,742.5 |
2,223.2 |
766.4 |
Hanwha Q CELLS Co., Ltd. |
|||||
Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss |
|||||
(in millions of US dollars, except share data and net loss per share) |
|||||
For the three months ended |
For the six months ended |
||||
June 30, 2015 |
March 31, 2015 |
June 30, 2015 |
|||
(unaudited) |
(unaudited) |
(unaudited) |
|||
Net sales |
338.0 |
333.5 |
671.5 |
||
Cost of goods sold |
279.6 |
285.1 |
564.7 |
||
Gross profit |
58.4 |
48.4 |
106.8 |
||
Selling and marketing expenses |
19.8 |
15.2 |
35 |
||
General and administrative expenses |
25.7 |
18.5 |
44.2 |
||
Research and development expenses |
11.9 |
9.9 |
21.8 |
||
Restructuring charges |
- |
22.1 |
22.1 |
||
Operating income (loss) |
1.0 |
(17.3) |
(16.3) |
||
Other expense |
|||||
Interest income |
2.1 |
0.3 |
2.4 |
||
Interest expense |
(16.9) |
(11.2) |
(28.1) |
||
Foreign exchange gain (loss) |
- |
0.9 |
0.9 |
||
Changes in fair value of derivative contracts |
1.2 |
8.2 |
9.4 |
||
Investment loss |
(1.5) |
- |
(1.5) |
||
Miscellaneous income, net |
0.7 |
1.0 |
1.70 |
||
Other expense, net |
(14.4) |
(0.8) |
(15.2) |
||
Loss before income taxes |
(13.4) |
(18.1) |
(31.5) |
||
Income taxes expenses (benefit) |
0.8 |
2.3 |
3.10 |
||
Net loss |
(14.2) |
(20.4) |
(34.6) |
||
Net loss attributable to Hanwha Q CELLS Co., |
|||||
Basic |
US$ (0.00) |
US$ (0.01) |
US$ (0.01) |
||
Diluted |
US$ (0.00) |
US$ (0.01) |
US$ (0.01) |
||
Number of shares used in computation of net |
|||||
Basic |
4,158,310,368 |
4,005,718,692 |
4,082,030,404 |
||
Diluted |
4,158,310,368 |
4,005,718,692 |
4,082,030,404 |
||
Other comprehensive loss |
|||||
Foreign currency translation adjustment |
0.1 |
(29.2) |
(29.1) |
||
Comprehensive loss |
(14.1) |
(49.6) |
(63.7) |
Hanwha Q CELLS Co., Ltd. |
||||||
Unaudited Interim Condensed Consolidated Statement of Cash Flows |
||||||
(in millions of US dollars) |
||||||
For the three months ended |
For the six months ended |
|||||
June 30, 2015 |
March 31, 2015 |
June 30, 2015 |
||||
(unaudited) |
(unaudited) |
(unaudited) |
||||
Cash flows from operating activities |
||||||
Net loss |
(14.2) |
(20.4) |
(34.6) |
|||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities |
||||||
Depreciation, amortization and impairment |
29.9 |
31.1 |
61.0 |
|||
Allowance for doubtful accounts |
- |
0.7 |
0.7 |
|||
Non-cash interest expense on amortization of long-term debt and litigation accruals |
4.0 |
5.7 |
9.7 |
|||
Unrealized (gains) loss on derivative contracts |
0.9 |
(6.6) |
(5.7) |
|||
Stock compensation expense |
0.4 |
- |
0.4 |
|||
Loss from disposal of subsidiaries |
1.5 |
- |
1.5 |
|||
Deferred tax expense |
0.8 |
2.3 |
3.1 |
|||
Changes in operating assets and liabilities |
||||||
Trade accounts receivable |
(0.7) |
(121.7) |
(122.4) |
|||
Inventories |
(44.4) |
(40.2) |
(84.6) |
|||
Restricted cash |
(28.5) |
(15.9) |
(44.4) |
|||
Other current assets |
(109.5) |
24.7 |
(84.8) |
|||
Other non current assets |
(1.2) |
- |
(1.2) |
|||
Trade accounts payable |
29.8 |
44.3 |
74.1 |
|||
Notes payable |
25.2 |
(0.4) |
24.8 |
|||
Warranty provisions |
1.1 |
12.5 |
13.6 |
|||
Accrued expenses |
5.0 |
3.4 |
8.4 |
|||
Deferred revenue |
442.2 |
- |
442.2 |
|||
Other current liabilities |
81.2 |
51.3 |
132.5 |
|||
Cash provided by (used in) operating activities |
423.5 |
(29.2) |
394.3 |
|||
Cash flows from investing activities |
||||||
Net cash received from an acquisition |
(0.0) |
70.2 |
70.2 |
|||
Capital expenditures |
(40.7) |
(17.8) |
(58.5) |
|||
Changes in restricted cash |
2.6 |
2.3 |
4.9 |
|||
Proceeds from disposal of a subsidiary |
0.5 |
0.5 |
||||
Issuance of loans to related parties |
(30.3) |
(6.1) |
(36.4) |
|||
Net cash provided by (used in) investing activities |
(67.9) |
48.6 |
(19.3) |
|||
Cash flows from financing activities |
||||||
Proceeds from borrowings from banks |
306.3 |
74.1 |
380.4 |
|||
Principal payments on bank borrowings |
(366.8) |
(61.6) |
(428.4) |
|||
Principal payments on capital lease obligations |
(1.3) |
(1.4) |
(2.7) |
|||
Proceeds from related party borrowings |
- |
8.0 |
8.0 |
|||
Principal payments on related party borrowings |
(11.4) |
- |
(11.4) |
|||
Arrangement fee and other related costs for bank borrowings |
(0.7) |
(0.9) |
(1.6) |
|||
Arrangement fee and other related cost for long-term notes |
- |
(1.0) |
(1.0) |
|||
Net cash provided by (used in) financing activities |
(73.9) |
17.2 |
(56.7) |
|||
Net increase in cash and cash equivalents |
281.7 |
36.6 |
318.3 |
|||
Effect of exchange rate changes on cash and cash equivalents |
(0.3) |
1.2 |
0.9 |
|||
Cash and cash equivalents at beginning of period |
194.5 |
156.7 |
156.7 |
|||
Cash and cash equivalents at end of period |
475.9 |
194.5 |
475.9 |
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