SEOUL, South Korea, Aug. 10, 2017 /PRNewswire/ -- Hanwha Q CELLS Co., Ltd. ("Hanwha Q CELLS" or the "Company") (NASDAQ: HQCL), a global leading photovoltaic manufacturer of high-performance, high-quality solar modules, today reported its unaudited financial results for the second quarter ended June 30, 2017. The Company will host a conference call to discuss the results at 8:00 a.m. Eastern Time (9:00 p.m. Korea Standard Time) on August 10, 2017.
Second Quarter 2017 Highlights
"Our second quarter results were in-line with our guidance and we are pleased to report that we are continuing to realize profits despite uncertainties in some of the major solar markets around the world," said Mr. Seong-woo Nam, Chairman and CEO of Hanwha Q CELLS. Mr. Nam continued, "We focused on expanding our footprint in markets with favorable conditions in response to the constantly changing market dynamics."
"Our 60 cell mono-PERC module, Q.PEAK, with output up to 305 Wp, continues to be well received in the residential market worldwide and is continuing to strengthen our competitiveness throughout all market segments," Mr. Nam remarked. Mr. Nam also stated that the Company is expected to "launch 72-cell mono-PERC modules, with output up to 365 Wp, in the second half of the year."
Mr. Jay Seo, CFO of Hanwha Q CELLS, said "We are continuing to strengthen our balance sheet by continuing to pay off interest-bearing debt instruments. Our debt-to-equity ratio, as of second quarter end was 361%, down 80% points from year-end 2016." Mr. Seo continued, "Given our capacity to continuously generate positive operating results, we expect to be well positioned to improve our financial position."
Second Quarter 2017 Results of Operations
Net Revenues
Gross Profit and Margin
Income from Operations and Operating Margin
Net Interest Expense
Foreign Currency Exchange Gain (Loss)
Gain (loss) on Change in Fair Value of Derivative Contracts
Income Tax Expense (Benefit)
Net Income (Loss) and Earnings (Loss) per ADS
Second Quarter 2017 Financial Position
As of June 30, 2017, the Company had cash and cash equivalents of $331.0 million, compared with $516.1 million as of March 31, 2017. The restricted cash as of June 30, 2017 was $95.0 million, compared with $110.7 million as of March 31, 2017.
As of June 30, 2017, accounts receivable was $358.4 million, compared with $295.3 million, as of March 31, 2017. Inventories were $337.2 million as of June 30, 2017, compared with $399.3 million as of March 31, 2017.
As of June 30, 2017, accounts payable was $407.8 million, compared with $464.6 million, as of March 31, 2017.
Total short-term bank borrowings (including the current portion of long-term bank borrowings) were $635.5 million, an increase of $203.0 million from the first quarter of 2017, due to a reclassification of long-term bank borrowings as short-term borrowings.
As of June 30, 2017, the Company had total long-term debt (net of current portion and long-term notes) of $336.1 million, a decrease of $306.9 million from the first quarter of 2017. The Company's long-term debt is comprised of bank and government borrowings, to be repaid in installments until their maturities, ranging from one to fourteen years.
Capital expenditures were $14.0 million in the second quarter of 2017.
Operations Updates
Production Capacity
As of June 30, 2017, the Company's in-house, annualized production capacities were 1,550 MW for ingot, 1,000 MW for wafer, 4,200 MW for cell and 4,200 MW for module.
By the end of this year, we expect our annual nameplate capacities to reach 1,600 MW for ingot, 1,100 MW for wafer, 4,600 MW for cell and 4,600 MW for module mainly from conversion efficiency improvements and de-bottlenecking of our production operations.
Furthermore, the Company has additional module availability of up to 2,100 MW (annualized) as of June 30, 2017 from Hanwha Q CELLS Korea Corporation, an affiliate of the Company. Hanwha Q CELLS Korea Corporation is currently ramping-up its capacity with expected capacity of approximately 2,200 MW in the second half of 2017.
Business Outlook
Third Quarter and Full Year 2017 Guidance
For the third quarter of 2017, the Company estimates net revenues in the range of $540 to 560 million.
For the full year 2017, the Company reiterates its previous guidance of:
Conference Call
The Company will host a conference call to discuss the results at 8:00 a.m. Eastern Time (9:00 p.m. Korea Standard Time) on August 10, 2017. The management will discuss the results and take questions following the prepared remarks.
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 or by clicking the following hyperlink: https://edge.media-server.com/m6/p/dcywj8kq.
The dial-in details for the live conference call are as follows:
| International Toll Free Dial-In Number |
+65 67135090 |
| United States |
+1 (845) 675-0437 |
| South Korea |
+82 (0)2 6490-3660 |
| Germany |
08001820671 |
| United Kingdom China, Domestic Hong Kong |
+44 2036214779 8008190121 / 4006208038 +852 30186771 |
| Passcode: HQCL |
A replay of the call will be available after the conclusion of the conference call on the investor relations section of the Company's website at www.hanwha-qcells.com and also by dialing the numbers below:
| International Toll Free Dial-In Number |
+61 2 8199 0299 |
| United States |
+1 (855) 452-5696 |
| South Korea |
0079861361602 |
| Germany United Kingdom |
08001802149 08082340072 |
| China, Domestic Hong Kong |
8008700206 / 4006322162 800963117 |
| Conference ID: 63369727 |
Replay time period: August 10, 2017 11:00 a.m. ET – August 18, 2017 09:59 a.m. ET
About Hanwha Q CELLS
Hanwha Q CELLS Co., Ltd. (NASDAQ:HQCL) is one of the world's largest and most recognized photovoltaic manufacturers for its high-performance, high-quality solar cells and modules. It is headquartered in Seoul, South Korea (Global Executive HQ) and Thalheim, Germany (Technology & Innovation HQ), with diverse international manufacturing facilities in Malaysia and China. 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 partnerships to its customers in the utility, commercial, governmental and residential markets. Hanwha Q CELLS is a flagship company of Hanwha Group, a FORTUNE Global 500 firm and a Top 10 business enterprise in South Korea. For more information, visit: http://www.hanwha-qcells.com/.
Safe Harbor Statement
This report contains forward-looking statements that are not statements of historical fact. 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. Such statements, particularly statements about our guidance for performance in the third quarter and the full year 2017, involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include pending administrative and civil actions in the United States under existing or potential new statutes and regulations governing trade between the United States and other countries, and potential antidumping, countervailing or other duties imposed on goods imported into the United States, as well as the Company's access to new capacity from an affiliate. Further information regarding these and other risks is included in Hanwha Q CELLS' filings with the Securities and Exchange Commission, including its annual report on Form 20-F. Except as required by law, Hanwha Q CELLS does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
| Hanwha Q CELLS Co., Ltd. |
||||||||||
| Unaudited Condensed Consolidated Balance Sheets |
||||||||||
| (in millions of US dollars, except share data) |
||||||||||
| June 30, |
December 31, |
|||||||||
| ASSETS |
(unaudited) |
(audited) |
||||||||
| Current assets |
||||||||||
| Cash and cash equivalents |
331.0 |
390.0 |
||||||||
| Restricted cash |
95.0 |
116.8 |
||||||||
| Accounts and notes receivable - net |
358.4 |
328.1 |
||||||||
| Receivables from related parties |
112.4 |
83.6 |
||||||||
| Inventories |
337.2 |
338.5 |
||||||||
| Loans to related parties |
12.0 |
13.0 |
||||||||
| Other current assets |
100.0 |
81.5 |
||||||||
| Total current assets |
1,346.0 |
1,351.5 |
||||||||
| Fixed assets - net |
775.2 |
755.5 |
||||||||
| Intangible assets - net |
17.8 |
16.6 |
||||||||
| Land use rights - net |
48.8 |
47.9 |
||||||||
| Deferred tax assets - net |
7.2 |
6.1 |
||||||||
| Loans to related parties |
7.0 |
6.6 |
||||||||
| Other long-term assets |
28.6 |
24.9 |
||||||||
| Total assets |
2,230.6 |
2,209.1 |
||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||||
| Current liabilities |
||||||||||
| Accounts payable |
169.9 |
171.1 |
||||||||
| Notes payable |
65.3 |
107.2 |
||||||||
| Payables to related parties |
172.6 |
161.6 |
||||||||
| Deferred revenue |
207.6 |
18.9 |
||||||||
| Accrued expenses |
46.8 |
36.6 |
||||||||
| Other payables |
19.9 |
20.2 |
||||||||
| Tax payables |
8.1 |
16.0 |
||||||||
| Short-term debt |
175.6 |
377.4 |
||||||||
| Current portion of long-term debt |
459.9 |
150.5 |
||||||||
| Customer deposits |
14.4 |
17.3 |
||||||||
| Derivative contracts |
1.4 |
1.0 |
||||||||
| Litigation accruals |
0.4 |
1.8 |
||||||||
| Deferred tax liabilities |
- |
2.4 |
||||||||
| Warranty provision |
40.5 |
42.2 |
||||||||
| Other current liabilities |
2.5 |
6.1 |
||||||||
| Total current liabilities |
1,384.9 |
1,130.3 |
||||||||
| Long-term debt |
336.1 |
643.7 |
||||||||
| Long-term warranty provision |
17.0 |
19.0 |
||||||||
| Deferred tax liabilities |
8.6 |
7.9 |
||||||||
| Total liabilities |
1,746.6 |
1,800.9 |
||||||||
| Stockholders' equity |
||||||||||
| Ordinary shares |
0.4 |
0.4 |
||||||||
| Additional paid-in capital |
432.0 |
431.7 |
||||||||
| Accumulated income |
143.6 |
107.3 |
||||||||
| Accumulated other comprehensive loss |
(92.0) |
(131.2) |
||||||||
| Total stockholders' equity |
484.0 |
408.2 |
||||||||
| Total liabilities, redeemable ordinary shares and stockholders' equity |
2,230.6 |
2,209.1 |
||||||||
| Hanwha Q CELLS Co., Ltd |
||||||||||
| Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) |
||||||||||
| (in millions of US dollars, except share data and net income (loss) per share) |
||||||||||
| For the three months ended |
For the six months ended |
|||||||||
| June 30, 2017 |
March 31, 2017 |
June 30, 2017 |
June 30, 2016 |
|||||||
| (unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|||||||
| Net sales |
577.7 |
432.0 |
1,009.7 |
1,152.9 |
||||||
| Cost of goods sold |
510.5 |
372.2 |
882.7 |
892.7 |
||||||
| Gross profit |
67.2 |
59.8 |
127.0 |
260.2 |
||||||
| Selling and marketing expenses |
29.5 |
21.9 |
51.4 |
55.9 |
||||||
| General and administrative expenses |
13.5 |
18.2 |
31.7 |
37.5 |
||||||
| Research and development expenses |
4.1 |
8.8 |
12.9 |
25.6 |
||||||
| Other operating expenses (income) |
- |
(17.4) |
(17.4) |
- |
||||||
| Income from operations |
20.1 |
28.3 |
48.4 |
141.2 |
||||||
| Other income (expenses) |
||||||||||
| Interest income |
2.1 |
1.0 |
3.1 |
4.8 |
||||||
| Interest expense |
(11.3) |
(10.5) |
(21.8) |
(26.9) |
||||||
| Foreign exchange gain (loss) |
7.1 |
2.5 |
9.6 |
5.8 |
||||||
| Gain (loss) on change in fair value of derivative contracts |
(3.0) |
(0.4) |
(3.4) |
(29.0) |
||||||
| Investment income (loss) |
0.9 |
1.2 |
2.1 |
(1.5) |
||||||
| Other income (expense) - net |
(0.2) |
0.9 |
0.7 |
5.8 |
||||||
| Other expense, net |
(4.4) |
(5.3) |
(9.7) |
(41.0) |
||||||
| Income before income tax |
15.7 |
23.0 |
38.7 |
100.1 |
||||||
| Income tax expense (benefit) |
(3.0) |
5.4 |
2.4 |
(4.2) |
||||||
| Net income |
18.7 |
17.6 |
36.3 |
104.3 |
||||||
| Net income attributable to Hanwha Q CELLS Co., Ltd.'s stockholders per share: |
||||||||||
| Basic |
US$0.00 |
US$0.00 |
US$0.01 |
US$0.03 |
||||||
| Diluted |
US$0.00 |
US$0.00 |
US$0.01 |
US$0.03 |
||||||
| Net income attributable to Hanwha Q CELLS Co., Ltd.'s stockholders per ADS: |
||||||||||
| Basic |
US$0.22 |
US$0.21 |
US$0.44 |
US$1.25 |
||||||
| Diluted |
US$0.22 |
US$0.21 |
US$0.44 |
US$1.25 |
||||||
| Number of shares used in computation of net income per share: |
||||||||||
| Basic |
4,158,769,098 |
4,158,769,098 |
4,158,769,098 |
4,158,998,117 |
||||||
| Diluted |
4,158,769,098 |
4,158,769,098 |
4,158,769,098 |
4,159,363,156 |
||||||
| Number of shares used in computation of net income per ADS: |
||||||||||
| Basic |
83,175,382 |
83,175,382 |
83,175,382 |
83,179,962 |
||||||
| Diluted |
83,175,382 |
83,175,382 |
83,175,382 |
83,187,263 |
||||||
| Other comprehensive income (loss) |
||||||||||
| Foreign currency translation adjustment |
16.4 |
22.9 |
39.3 |
(7.3) |
||||||
| Pension adjustments |
- |
- |
- |
- |
||||||
| Comprehensive income |
35.1 |
40.5 |
75.6 |
97.0 |
||||||
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