SAN FRANCISCO and WUXI, China, Aug. 6 /PRNewswire-Asia/ -- Suntech Power Holdings Co., Ltd. (NYSE: STP), the world's largest producer of crystalline silicon solar panels, today announced preliminary financial results for the second quarter ended June 30, 2010, including the impact of restructuring the Company's Shanghai manufacturing facility and impairment charges related to its investment in Shunda Holdings Co., Ltd., a manufacturer of polysilicon and silicon wafers.
Suntech expects total net revenues for the second quarter of 2010 to be in the range of $620 million to $630 million. Gross margin is expected to be in the range of 17.5% to 18.5%.
Dr. Zhengrong Shi, Suntech's Chairman and CEO, said, "Strong top line results for the second quarter reflect extremely robust global demand for solar. Customers in Europe, Asia, the Middle East and the Americas are increasingly recognizing the benefits of adopting solar and are choosing Suntech as a key partner. Our expected operating results for the second quarter reflect our competitive advantages in these markets."
As a result of the depreciation of the Euro versus the USD during the period, Suntech expects the impact from foreign exchange loss net of hedging gains to be approximately $35 million for the second quarter of 2010, in line with previously announced expectations.
Restructure of Shanghai Facility and Impairment Charges Relating to Shunda Holdings
Due to the rapid cost reduction and improving competitiveness of crystalline silicon solar panels, Suntech has been restructuring operations at its Shanghai facility to focus on the manufacture of crystalline silicon solar cells. As part of the restructuring, Suntech has ceased the manufacture of amorphous silicon thin film solar panels. As a result, Suntech expects to incur a thin film equipment non-cash impairment charge of approximately $50 million to $55 million in the second quarter of 2010.
Suntech also expects to incur non-cash charges of $106 million to $126 million in the second quarter of 2010 related to its investment and prepayments to Shunda. Due to debt obligations, Shunda is currently undergoing significant reorganization.
Commenting on the charges, Dr. Shi said, "While the thin film and Shunda related charges will significantly impact our second quarter financial results, they have no bearing on our core manufacturing operations which are performing very well. Going forward, we will continue to focus on our primary mission of supplying the most reliable and high performance solar panels in the industry."
Suntech expects the total restructuring and impairment charges to have a negative impact of approximately $0.87 to $1.01 per American Depository Share (ADS) in the second quarter of 2010. Inclusive of the restructuring and impairment charges, Suntech expects the net loss for the second quarter of 2010 to be in the range of $147 million to $179 million, which corresponds to negative $0.82 to negative $1.00 per ADS.
The estimates presented in this press release are preliminary and unaudited. Adjustments to the estimates and projections set forth in this press release may be identified as a result of, among other things, finalization of the Company's financial closing procedures for the second quarter of 2010. As such, these estimates and expectations set forth herein may change materially.
Suntech will hold a conference call at 8a.m. U.S. Eastern Time on Wednesday, August 18, 2010, before the U.S. market opens, to announce its financial results for the second quarter ended June 30, 2010. Dial in details for the conference call are posted on the Investor Relations section of Suntech's website at http://ir.suntech-power.com .
About Suntech
Suntech Power Holdings Co., Ltd. (NYSE: STP) produces industry-leading solar products for residential, commercial, industrial, and utility applications. With regional headquarters in China, Switzerland, and the United States, and gigawatt-scale manufacturing worldwide, Suntech has delivered more than 10,000,000 photovoltaic panels to over a thousand customers in more than 80 countries. Suntech's pioneering R&D creates customer-centric innovations that are driving solar to grid parity against fossil fuels. Our mission is to provide everyone with reliable access to nature's cleanest and most abundant energy source.
For more information about our people and products visit http://www.suntech-power.com .
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 "plans to", "expects to," "anticipates," "future," "intends to," "plans," "believes," "considers" and similar statements, and includes Suntech's estimates for second quarter 2010 revenues, gross margin, foreign exchange loss and impairments to investments in thin film equipment and Shunda Holdings Co., Ltd, and net income and EPS. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in Suntech's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. Suntech does not undertake any obligation to update any forward- looking statement as a result of new information, future events or otherwise, except as required under applicable law.
For further information, please contact:
Rory Macpherson
Investor Relations Director
Tel: +1-415-268-8975
Email: rory@suntech-power.com
Kristen McNally
Executive Vice President
The Piacente Group, Inc.
Tel: +1-212-481-2050
Email: suntech@tpg-ir.com
