Hanwha SolarOne Reports Fourth Quarter 2012 and Full Year 2012 Results

Hanwha SolarOne Co., Ltd. ("SolarOne" or the "Company") (Nasdaq: HSOL), a vertically integrated manufacturer of silicon ingots, wafers and photovoltaic ("PV") cells and modules in China, today reported its unaudited financial results for the quarter ended December 31, 2012. The Company will host a conference call to discuss the results at 8:00 am Eastern Time (8:00 pm Shanghai Time) on March 18, 2012. A slide presentation with details of the results will also be available on the Company's website prior to the call.

FOURTH QUARTER 2012 HIGHLIGHTS

  • Total net revenues were RMB836.7 million (US$134.3 million), a decrease of 13.4% from 3Q12, and a decrease of 14.5% from 4Q11.
  • PV module shipments, including module processing services, were 198.9 MW, a decrease of 17.0% from 239.5 MW in 3Q12, and an increase of 5.2% from 189.1 MW in 4Q11.
  • Average selling price ("ASP"), excluding module processing services, decreased to RMB3.75 per watt(US$0.60) from RMB4.22 per watt in 3Q12, and decreased from RMB6.29 per watt in 4Q11.
  • The Company recorded certain non-cash charges totaling RMB377.5 million (US$60.6 million), includingRMB53.9 million (US$8.6 million) from inventory write-down, RMB87.6 million (US$14.1 million) from provisions for doubtful debt of accounts receivable and RMB236.0 million (US$37.9 million) from provisions for advance payments on the Company's purchase commitment under long-term supply contracts.
  • Gross loss was RMB261.8 million (US$42.0 million), compared with gross loss of RMB56.1 million in 3Q12 and gross loss of RMB604.6 million in 4Q11.
  • Gross margin decreased to negative 31.3%, compared with negative 5.8% in 3Q12, due to both the lower ASP and the non-cash charges from inventory write-down and provisions for advance payments associated with long-term supply contracts. Gross margin in 4Q11 was negative 61.8%. Gross margin excluding the aforementioned provisions would have been negative 2.6% in 4Q12.
  • Operating loss increased by 149.1% to RMB625.8 million (US$100.4 million) from an operating loss ofRMB251.2 million in 3Q12, compared to an operating loss of RMB1, 005.2 million in 4Q11. The increase in operating loss in 4Q12 from 3Q12 was primarily due to the significantly higher gross loss and non-cash charge from provisions for doubtful debt of accounts and advance payments on the Company's purchase commitment under long-term supply contracts..
  • Operating margin decreased to negative 74.8% from negative 26.0% in 3Q12, compared with negative 102.8% in 4Q11.
  • Net loss attributable to shareholders on a non-GAAP basis[1] was RMB650.6 million (US$104.4 million), compared with net loss of RMB301.9 million in 3Q12 and net loss of RMB862.3 million in 4Q11.
  • Net loss per basic ADS on a non-GAAP basis was RMB7.70 (US$1.24), compared with net loss per basic ADS on a non-GAAP basis of RMB3.57 in 3Q12 and net loss per ADS on a non-GAAP basis of RMB10.22 in 4Q11.
  • Net loss attributable to shareholders on a GAAP basis was RMB670.4 million (US$107.6 million), compared with net loss attributable to shareholders on a GAAP basis of RMB322.1 million in 3Q12. The Company recorded a non-cash gain of RMB1.4 million (US$0.2 million) from the change in fair value of the convertible feature of the Company's convertible bonds as compared to a non-cash gain of RMB1.2 million in 3Q12. Net loss attributable to shareholders on a GAAP basis in 4Q11 was RMB832.9 million, including a non-cash gain of RMB33.2 million from the change in fair value of the convertible feature of the Company's convertible bonds. As explained in prior quarters, the fluctuations in the fair value of the convertible feature of the Company's convertible bonds are primarily due to changes in the Company's ADS price, over which the Company has no direct control, and does not reflect the operating performance of the Company.
  • Net loss per basic ADS on a GAAP basis was RMB7.93 (US$1.27), compared with net loss per basic ADS on a GAAP basis of RMB3.81 in 3Q12 and net loss per basic ADS on a GAAP basis of RMB9.88 in 4Q11.
  • Annualized Return on Equity ("ROE") on a non-GAAP basis was negative 97.6% in 4Q12, compared with negative 38.5% in 3Q12 and negative 81.5% in 4Q11.
  • Annualized ROE on a GAAP basis was negative 87.0% in 4Q12, compared to negative 36.0% in 3Q12 and negative 70.6% in 4Q11.

FULL YEAR 2012 HIGHLIGHTS

  • Total net revenues were RMB3, 678.4 million (US$590.4 million), representing a decrease of 42.7% fromRMB6,416.5 million in 2011.
  • PV module shipments, including module processing services, reached 829.8 MW, representing a decrease of 1.7% from 844.4 MW in 2011. Module processing services accounted for 4.7% of total revenues in 2012.
  • The Company recorded total non-cash charges of RMB649.7 million (US$104.3 million), includingRMB326.1 million (US$52.3 million) from inventory write-down as a result of a lower of cost or market assessment and a regular provision for obsolescence, RMB236.0 million (US$37.9 million) from provisions for advance payments associated with long-term supply contracts, RMB87.6 million (US$14.1 million) from provisions for doubtful debt of accounts receivable and RMB 512.0 million (US$ 82.2 million) was recognized in cost of revenues and RMB137.7 million (US$ 22.1 million) in operating expenses.
  • Gross loss in 2012 was RMB325.5 million (US$52.2 million), compared with a gross loss of RMB217.1 million in 2011.
  • Gross margin was negative 8.8%, compared with negative 3.4% in 2011.
  • Operating loss for 2012 was RMB1, 180.6 million (US$189.5 million), compared with an operating loss ofRMB1, 096.4 million in 2011.
  • Operating margin was negative 32.1%, compared with negative 17.1% in 2011.
  • Net loss attributable to shareholders on a non-GAAP basis1 was RMB1, 468.3 million (US$235.7 million), compared with net loss attributable to shareholders of RMB1, 068.5 million in 2011.
  • Net loss per basic ADS on a non-GAAP basis was RMB17.39 (US$1.62), compared with net loss per basic ADS of RMB12.71 in 2011.
  • Net loss attributable to shareholders on a GAAP basis was RMB1, 562.9 million (US$250.9 million), compared with net loss attributable to shareholders of RMB930.1 million in 2011.
  • Net loss per basic ADS on a GAAP basis was RMB18.51 (US$2.97), compared with net loss per basic ADS of RMB11.06 in 2011.
  • ROE on a non-GAAP basis was negative 47.8% in 2012, compared with negative 24.8% in 2011.
  • ROE on a GAAP basis was negative 44.3% in 2012, compared with negative 19.6% in 2011.
[1] All non-GAAP numbers used in this press release exclude the accounting impact from the adoption of ASC 815-40, which relates to the accounting treatment for the convertible bonds. Please refer to the attached financial statements for the reconciliation between the GAAP and non-GAAP financial results.

Mr. Ki-Joon HONG, Chairman and CEO of Hanwha SolarOne, commented, "The year 2012 will be remembered as one of tremendous challenge and change for the solar industry, with significant industry overcapacity and regulatory changes in key markets leading to a slowdown in demand, accompanied by rapidly decelerating prices. Almost all companies, including ours, found it virtually impossible to record profitability in such an operating environment. In spite of the degrading operating environment we faced, our company made significant progress in a number of areas; including bringing greater balance between our OEM model and branded one, diversifying our sales base into new emerging growth markets, improving our non-poly processing cost structure to be competitive with industry leaders, instituted operational efficiencies at our manufacturing sites including enhanced automation, better quality, improved product features and new product introductions, and secured financing from a variety of sources both within and outside mainland China."

Chairman HONG continued " Our volumes in the fourth quarter did not reflect the improving demand environment of late as we chose to sacrifice sales at loss making prices and our profitability was impacted by a number of non-cash charges. However, we are well on track to achieving 50% improvement in first quarter 2013 shipment volume and over 50% for the full year. We have good visibility in South Africa and Japan for the first half of this year in particular, and continue to see growing opportunities in China, the US, the Middle East and other emerging markets of importance. Our funding for 2013 is proceeding as planned. Industry prices seem to have stabilized, and we see good opportunities to exploit synergies with our sister company Hanwha Q.CELLS, including a sizeable module tolling business. Profitability will remain challenging for most, if not all of 2013, but we feel confident that we are making good progress on the return to a path of profitability, aided by forecasted improvements in the operating environment and securing the company to challenge for industry leadership longer term."

FOURTH QUARTER 2012 RESULTS

  • Total net revenues were RMB836.7 million (US$134.3 million), a decrease of 13.4% from RMB966.1 millionin 3Q12, and a decrease of 14.5% from RMB978.3 million in 4Q11. The decrease in total net revenues in 4Q12 compared with 3Q12 was primarily due to lower shipments and reduced ASP.
  • PV module shipments, including module processing services, were 198.9 MW, a decrease from 239.5 MW in 3Q12, and an increase from 189.1 MW in 4Q11.

Module revenue by shipping destination Q4 12. (PRNewsFoto/Hanwha SolarOne Co., Ltd.)

 

Module revenue by shipping destination Q3 12. (PRNewsFoto/Hanwha SolarOne Co., Ltd.)
  • Module shipments to Japan grew from 3% in 3Q12 to 20% in 4Q12 at a good pricing level. The China market remained solid for the Company and increased from 11% in 3Q12 to 15% of module shipments in 4Q12. The dispersion of shipments this quarter saw relatively new and potentially attractive markets come to the forefront with large contributions from Greece (16%), Thailand (8%) and India (6%). Historically strong markets accounted for a smaller proportion of shipments as a result of the aforementioned; shipments fromGermany declined to 8% from 39% in 3Q12 as the full effect of the July 1 incentives reductions were felt and the US decreased to 6% this quarter. In 2012, shipments to Europe and Africa (EA) contributed 62% to total module shipments with Asian Pacific (AP) accounting for 24% and North America (NA) 8%.
  • Average selling price ("ASP"), excluding module processing services, decreased to RMB3.75 per watt(US$0.60) from RMB4.22 per watt in 3Q12 and from RMB6.29 per watt in 4Q11.
  • Gross loss of 4Q12 was RMB261.8 million (US$42.0 million), compared with a gross loss of RMB56.1 million in 3Q12 and a gross loss of RMB604.6 million in 4Q11.
  • Gross margin decreased to negative 31.3%, compared with negative 5.8% in 3Q12, due to both the lower ASP and the non-cash charges from inventory write-down and provisions for advance payments on the Company's purchase commitment under long-term supply contracts. Gross margin in 4Q11 was negative 61.8%.
  • The blended cost of goods sold ("COGS") per watt, excluding module processing services, was US$0.81(including $0.17 non-cash charges from inventory write-down and provisions for advance payments associated with long-term supply contract), representing a 14.1% increase from US$0.71 in 3Q12. The blended COGS takes into account the production cost (silicon and non-silicon) using internally sourced wafers, purchase costs and additional processing costs of externally sourced wafers and cells. Excluding non-cash charges, the Company would have achieved a 9.9% reduction in blended COGS to $0.64.
  • Operating loss of 4Q12 was RMB625.8 million (US$100.4 million), compared with an operating loss ofRMB251.2 million in 3Q12 and an operating loss of RMB1, 005.2 million in 4Q11. Operating margin decreased to negative 74.8% from negative 26.0% in 3Q12, compared to negative 102.8% in 4Q11.
  • Operating expenses as a percentage of total net revenues were 43.5% in 4Q12, compared with 20.2% in 3Q12 and 40.9% in 4Q11. The higher operating expenses in 4Q12 compared with 3Q12 was primarily due to non-cash charges from provisions for doubtful debt of accounts receivable and decrease in revenue.
  • Interest expense was RMB73.9 million (US$11.9 million), compared with RMB79.9 million in 3Q12 andRMB41.7 million in 4Q11.
  • The Company recorded a net gain of RMB19.0 million (US$3.0 million), which combined a foreign exchange gain with a loss from the change in fair value of derivatives. The Company recorded a net gain of RMB18.1 million in 3Q12 and a net loss of RMB0.1 million in 4Q11 for the foreign exchange gain/loss and the gain/loss from change in fair value of derivatives.
  • Gain from the change in fair value of the conversion feature of the Company's convertible bonds was RMB1.4 million (US$0.2 million), compared with RMB1.2 million in 3Q12 and RMB33.2 million in 4Q11. The fluctuations resulting from the adoption of ASC 815-40 on January 1, 2009, were primarily due to changes in the Company's ADS price during the quarter. This line item has fluctuated, and is expected to continue to fluctuate quarter-to-quarter. The Company has no direct control over the fluctuations.
  • Income tax benefit in 4Q12 increased to RMB9.1 million (US$1.5 million), compared with RMB15.8 million in 3Q12 and RMB179.9 million in 4Q11.
  • Net loss attributable to shareholders on a non-GAAP basis1 was RMB650.6 million (US$104.4 million), compared with a net loss attributable to shareholders of RMB301.9 million in 3Q12 and a net loss attributable to shareholders of RMB862.3 million in 4Q11.
  • Net loss per basic ADS on a non-GAAP basis was RMB7.70 (US$1.24), compared with net loss per basic ADS on a non-GAAP basis of RMB3.57 in 3Q12 and net loss per basic ADS on a non-GAAP basis ofRMB10.22 in 4Q11.
  • Net loss attributable to shareholders on a GAAP basis was RMB670.4 million (US$107.6 million), compared with net loss attributable to shareholders of RMB322.1 million in 3Q12 and net loss attributable to shareholders of RMB832.9 million in 4Q11.
  • Net loss per basic ADS on a GAAP basis was RMB7.93 (US$1.27), compared with net loss per basic ADS ofRMB3.81 in 3Q12 and net loss per basic ADS of RMB9.88 in 4Q11.
  • Annualized ROE on a non-GAAP basis was negative 97.6% in 4Q12, compared with negative 38.5% in 3Q12 and negative 81.5% in 4Q11.
  • Annualized ROE on a GAAP basis was negative 87.0% in 4Q12, compared with negative 36.0% in 3Q12 and negative 70.6% in 4Q11.

FINANCIAL POSITION

As of December 31, 2012, the Company had cash and cash equivalents of RMB676.5 million (US$108.6 million) and net working capital of RMB44.3 million (US$7.1 million), compared with cash and cash equivalents ofRMB1,607.2 million and net working capital of RMB915.4 million as of September 30, 2012. Total short-term bank borrowings (including the current portion of long-term bank borrowings) were RMB1, 629.6 million (US$261.6 million), compared with RMB1, 917.7 million as of September 30, 2012.

As of December 31, 2012, the Company had total long-term debt of RMB2, 653.7 million (US$425.9 million), which comprised both long-term bank borrowings and convertible notes payable. The Company's long-term bank borrowings are to be repaid in installments until their maturities ranging from 2 to 4 years. Holders of the convertible notes have the option to require the Company to redeem the notes beginning on January 15, 2015.

Net cash used in operating activities in 4Q12 was RMB440.7 million (US$70.7 million), compared with net cash used in operating activities of RMB322.1 million in 3Q12 and net cash generated from operating activities ofRMB311.3 million in 4Q11.

As of December 31, 2012, accounts receivable were RMB957.0 million (US$153.6 million), compared withRMB1, 154.6 million as of September 30, 2012 and RMB537.5 million as of December 31, 2011. Day's sales outstanding (DSO) increased to 164 days in 4Q12 from 126 days in 3Q12 and 82 days in 4Q11. The decline in receivables from 3Q12 to 4Q12 reflects lower shipments and revenues. The increase in DSO reflects longer credit terms to meet industry competitive standards. As of December 31, 2012, inventories increased toRMB838.7 million (US$134.6 million) from RMB757.0 million as of September 30, 2012, and from RMB684.0 million as of December 31, 2011. Day's inventory was 65 days in 4Q12 compared with 63 days in 3Q12 and 53 days in 4Q11.

Capital expenditures were RMB71.4 million (US$11.5 million) in 4Q12. For full year 2012, total capital expenditures were RMB598.0 million (US$96.0 million).

The Company has from time to time been buying back its convertible bonds since January 1, 2012 and may do so in the future, subject to market conditions and other factors. The Company has purchased approximately $72 million out of US$172.5 million in face value.

CAPACITY EXPANSION

As of December 31, 2012, the Company had production capacities of 800 MW for ingot and wafer, 1.3 GW for cell and 1.5 GW for module. The Company currently has no near-term plan to add additional capacities. Management will review expansion needs in the future in line with changes in overall market demand.

BUSINESS OUTLOOK

  • The Company provides the following guidance based on current operating trends and market conditions.

For the first quarter 2013 the Company expects:

  • Module shipments 300MW or above.

For the full year 2013, the Company expects:

  • Module shipments between 1.3-1.5GW of which about 30-35% will be for PV module processing services.
  • Capital expenditures of $50 million depending on demand and other market conditions.

CONFERENCE CALL

The Company will host a conference call to discuss the fourth quarter and full year of 2012 results at 8:00 AM Eastern Time (8:00 PM Shanghai Time) on March 18, 2013.

Mr. Ki-Joon HONG, Chairman and CEO; Mr. MinSu KIM, President; Mr. Dong Kwan KIM, Chief Strategy Officer; Mr. Jung Pyo SEO, Chief Financial Officer; and Mr. Paul Combs, Vice President of Investor Relations, will discuss the results and take questions following the prepared remarks.

The dial-in details for the live conference call are as follows:

U.S. Toll Free Number: 1 866 519 4004
U.S. New York local number: 1 718 354 1231
International dial-in number: +65 6723 9381
China Toll Free Number: 800 819 0121
400 620 8038
Passcode: HSOL

A live webcast of the conference call will be available on the investor relations section of the Company's website at: http://www.hanwha-solarone.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:

U.S. Toll Free Number: 1 866 214 5335
International dial-in number: +1 612 8235 5000
Pass code: 55275126

FOREIGN CURRENCY CONVERSION

The conversion in this release of Renminbi into U.S. dollars is made solely for the convenience of the reader, and is based on the exchange rate as set forth in the H.10 statistical release of the Federal Reserve Board as ofDecember 31, 2012, which was RMB6.2301 to US$1.00. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate onDecember 31, 2012 or at any other date. The percentages stated in this press release are calculated based on Renminbi amounts.

USE OF NON-GAAP FINANCIAL MEASURES

The Company has included in this press release certain non-GAAP financial measures, including certain line items presented on the basis that the accounting impact of ASC 815-40 had not been recorded. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of the Company and when planning and forecasting future periods. Readers are cautioned not to view non-GAAP financial measures on a stand-alone basis or as a substitute for GAAP measures, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP measures with non-GAAP measures also included herein.

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 include 1Q and full-year 2012 estimates for PV product shipments, ASPs, 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. Hanwha SolarOne disclaims any obligation to update or correct any forward-looking statements.

About Hanwha SolarOne

Hanwha SolarOne Co., Ltd. (NASDAQ: HSOL) is a vertically-integrated manufacturer of silicon ingots, wafers, PV cells and modules. Hanwha SolarOne offers high-quality, reliable products and services at competitive prices. Partnering with third-party distributors, OEM manufacturers, and systems integrators, Hanwha SolarOne serves the utility, commercial, government, and residential markets. The Company maintains a strong presence worldwide, with employees located throughout Europe, North America and Asia, and embraces environmental responsibility and sustainability, with an active role in the voluntary photovoltaic recycling program. Hanwha Group, Hanwha SolarOne's largest shareholder, is active in solar project development and financing, and plans to produce polysilicon in the future. For more information, please visit: http://www.hanwha-solarone.com

Financial Statements

Hanwha SolarOne Co., Ltd.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$")
December 31 September 31 December 31 December 31
2011 2012 2012 2012
(Audited) (Unaudited) (Unaudited) (Unaudited)
RMB'000 RMB'000 RMB'000 US$'000
ASSETS
Current assets
Cash and cash equivalents 1,976,555 1,607,164 676,476 108,582
Restricted cash 281,626 228,132 150,462 24,151
Derivative contracts 29,091 - - -
Accounts receivable, net 537,540 1,154,597 956,969 153,604
Notes receivable 60,208 5,429 2,681 430
Inventories, net 684,049 756,966 838,727 134,625
Advance to suppliers, net 475,645 401,675 166,838 26,779
Other current assets 528,572 344,587 356,784 57,268
Deferred tax assets - net 264,590 249,136 150,297 24,124
Amount due from related parties 241,453 422,205 420,610 67,513
Total current assets 5,079,329 5,169,891 3,719,844 597,076
Non-current assets
Fixed assets - net 4,715,962 4,784,458 4,779,873 767,222
Intangible assets - net 334,987 336,819 335,047 53,779
Deferred tax assets - net 16,493 8,237 107,304 17,224
Long-term deferred expenses 49,702 29,854 25,200 4,045
Long-term prepayment 204,570 176,884 184,065 29,544
Total non-current assets 5,321,714 5,336,252 5,431,489 871,814
TOTAL ASSETS 10,401,043 10,506,143 9,151,333 1,468,890
LIABILITIES
Current liabilities
Derivative contracts 30,670 13,834 17,311 2,779
Short-term bank borrowings 1,764,251 1,459,990 1,162,372 186,574
Long-term bank borrowings, current portion 242,604 457,725 467,204 74,991
Accounts payable 1,024,947 1,076,029 1,061,723 170,418
Notes payable 462,602 641,135 314,517 50,483
Accrued expenses and other liabilities 375,238 364,028 400,537 64,291
Customer deposits 84,871 46,490 36,314 5,829
Unrecognized tax benefit 143,473 143,473 143,473 23,029
Amount due to related parties 42,342 51,815 72,045 11,564
Total current liabilities 4,170,998 4,254,519 3,675,496 589,958
Non-current liabilities
Long-term bank borrowings 1,352,373 2,406,121 2,285,106 366,785
Convertible bonds 498,646 351,778 368,590 59,163
Long term payable 50,000 52,450 50,000 8,026
Deferred tax liabilities 25,387 24,945 24,798 3,980
Total non-current liabilities 1,926,406 2,835,294 2,728,494 437,954
TOTAL LIABILITIES 6,097,404 7,089,813 6,403,990 1,027,912
Redeemable ordinary shares 24 24 24 4
EQUITY
Shareholders' equity
Ordinary shares 315 316 316 51
Additional paid-in capital 3,996,418 4,002,418 4,004,199 642,718
Statutory reserves 174,456 174,727 174,456 28,002
Retained earnings 132,426 (760,294) (1,430,433) (229,600)
Accumulated other comprehensive income - (861) (1,219) (197)
Total shareholders' equity 4,303,615 3,416,306 2,747,319 440,974
TOTAL EQUITY 4,303,639 3,416,330 2,747,343 440,978
TOTAL LIABILITIES, REDEEMABLE ORDINARY SHARES AND SHAREHOLDERS' EQUITY 10,401,043 10,506,143 9,151,333 1,468,890

 

 

 

Hanwha SolarOne Co., Ltd.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$"),
except for number of shares (ADS) and per share (ADS) data
For the three months ended For the years ended
December 31 September 30 December 31 December 31 December 31 December 31 December 31
2011 2012 2012 2012 2011 2012 2012
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
RMB'000 RMB'000 RMB'000 US$'000 RMB'000 RMB'000 US$'000
Net revenues 978,272 966,129 836,663 134,293 6,416,485 3,678,380 590,420
Cost of revenues (1,582,900) (1,022,182) (1,098,413) (176,307) (6,633,542) (4,003,885) (642,667)
- - - - - - -
Gross profit / (loss) (604,628) (56,053) (261,750) (42,014) (217,057) (325,505) (52,247)
Operating expenses
Selling expenses (98,185) (98,322) (115,663) (18,565) (279,788) (348,568) (55,949)
G&A expenses (145,565) (73,807) (221,653) (35,578) (396,639) (415,707) (66,726)
R&D expenses (22,071) (23,001) (26,709) (4,287) (68,217) (90,820) (14,578)
Loss on goodwill impairment (134,735) - (134,735) - -
- - - - - - -
Total operating expenses (400,556) (195,130) (364,025) (58,430) (879,379) (855,095) (137,253)
- - - - - - -
Operating loss (1,005,184) (251,183) (625,775) (100,444) (1,096,436) (1,180,600) (189,500)
Interest expenses (41,732) (79,876) (73,927) (11,866) (171,059) (299,515) (48,075)
Interest income 3,207 5,489 3,237 520 11,763 15,841 2,543
Exchange gain (loss) (5,029) 25,783 21,669 3,478 (3,965) 8,875 1,425
Gain (loss) on change in fair value of derivative 4,919 (7,667) (2,688) (431) (70,778) 5,326 855
Gain (loss) on change in conversion feature fair value of convertible bond 33,181 1,219 1,411 226 264,384 (5,692) (914)
Loss on extinguishment of debt - (29,054) - - - (82,713) (13,276)
Other income 1,808 2,259 2,739 440 5,144 9,265 1,487
Other expenses (3,986) (4,880) (6,150) (987) (14,102) (18,391) (2,952)
- - - - - - -
Net loss before income tax (1,012,816) (337,910) (679,484) (109,064) (1,075,049) (1,547,604) (248,407)
Income tax expenses 179,877 15,776 9,074 1,456 144,945 (15,255) (2,449)
- - - - - - -
Net loss (832,939) (322,134) (670,410) (107,608) (930,104) (1,562,859) (250,856)
- - - - - - -
Net loss attributable
to shareholders (832,939) (322,134) (670,410) (107,608) (930,104) (1,562,859) (250,856)
Net loss per share
Basic (1.98) (0.76) (1.59) (0.25) (2.21) (3.70) (0.59)
Diluted (1.98) (0.76) (1.59) (0.25) (2.21) (3.70) (0.59)
Shares used in computation
Basic 421,676,232 422,255,918 422,565,284 422,565,284 420,325,701 422,167,505 422,167,505
Diluted 421,676,232 422,255,918 422,565,284 422,565,284 420,325,701 422,167,505 422,167,505
Net loss per ADS
Basic (9.88) (3.81) (7.93) (1.27) (11.06) (18.51) (2.97)
Diluted (9.88) (3.81) (7.93) (1.27) (11.06) (18.51) (2.97)
ADSs used in computation
Basic 84,335,246 84,451,184 84,513,057 84,513,057 84,065,140 84,433,501 84,433,501
Diluted 84,335,246 84,451,184 84,513,057 84,513,057 84,065,140 84,433,501 84,433,501

 

 

Hanwha SolarOne Co., Ltd.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$")
For the three months ended For the years ended
December 31, 2011 September 30, 2012 December 31, 2012 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2012
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
RMB'000 RMB'000 RMB'000 US$'000 RMB'000 RMB'000 US$'000
Cash flow from operating activities
Net loss (832,939) (322,134) (670,410) (107,608) (930,104) (1,562,859) (250,856)
Adjustments to reconcile net income
(loss) to net cash
provided (used) in operating activities:
Unrealised (gain)/loss from derivative contracts (31,154) 10,911 3,477 558 1,021 15,732 2,524
Amortization of convertible bonds discount 26,133 22,454 18,223 2,925 75,595 88,507 14,207
Changes in fair value of conversion feature of
convertible bonds
(33,181) (1,229) (1,411) (226) (264,384) 5,692 914
Loss on extinguishment of debt - 29,054 - - - 82,713 13,276
Loss from disposal of fixed assets 473 2,986 1,364 219 1,714 8,497 1,364
Depreciation and amortization 52,464 92,769 107,232 17,211 218,641 373,155 59,896
Loss on goodwill impairment 134,735 - - - 134,735 - -
Amortization of long-term deferred expenses 6,129 4,551 4,616 741 11,408 21,577 3,463
Provision for doubtful debt of advance to suppliers 287,749 - 170,012 27,289 287,742 170,012 27,289
Provision for doubtful debt of other receivables 54,456 - 50,048 8,033 54,456 50,048 8,033
Provision for amount due from related party - - 15,960 2,562 - 15,960 2,562
Reversal of doubtful debt of advance to suppliers - - - - - - -
Provision for doubtful debt of accounts receivable - - 87,626 14,065 1,778 87,626 14,065
Write down of inventories 305,820 44,916 53,926 8,656 583,097 326,051 52,335
Stock compensation expense 2,208 2,197 1,781 286 38,331 7,782 1,249
Warranty provision 8,641 4,662 6,788 1,090 61,059 25,694 4,124
Warranty reversal (7,022) (6,688) (389) (62) (30,615) (9,958) (1,598)
Deferred tax benefit (112,641) (15,242) (375) (60) (173,303) 22,893 3,675
Unrecognized tax benefit (26,344) - - - -
Changes in operating assets and liabilities
Restricted cash 25,974 (44,117) 84,390 13,546 (28,693) 12,379 1,987
Inventory 195,468 (116,995) (135,687) (21,779) (476,373) (480,729) (77,162)
Account and notes receivables 726,054 (350,744) 112,392 18,041 693,281 (450,747) (72,351)
Advance to suppliers and long-term prepayments 124,433 26,088 57,644 9,252 85,883 159,300 25,569
Long-term deferred expenses (2,322) - - - (2,322) (1,484) (238)
Intangible assets - - - - (134,719) (7,104) (1,140)
Other current assets (128,730) 9,550 (62,079) (9,965) (206,408) 135,524 21,753
Amount due from related parties (144,669) (98,377) (14,365) (2,306) (198,634) (195,117) (31,318)
Accounts and notes payable (360,070) 364,254 (377,764) (60,635) 381,841 48,150 7,728
Accrued expenses and other liabilities 25,049 31,388 32,706 5,248 (60,025) 17,347 2,784
Customer deposits 25,955 (17,414) (10,176) (1,633) 51,333 (48,557) (7,794)
Amount due to related parties (11,320) 2,640 26,254 4,214 29,159 29,703 4,768
Long-term payable - 2,450 (2,450) (393) 50,000 - -
Net cash provided (used) in operating activities 311,349 (322,070) (440,667) (70,731) 255,494 (1,052,213) (168,892)
Cash flows from investing activities
Acquisition of fixed assets (289,902) (80,052) (71,423) (11,464) (2,400,481) (597,978) (95,982)
Change of restricted cash 27,638 1,472 (5,495) (882) (37,443) 63,461 10,186
Net cash provided (used) in investing activities (262,264) (78,580) (76,918) (12,346) (2,437,924) (534,517) (85,796)
Cash flows from financing activities
Proceeds from share lending - - - - 9 - -
Proceeds from exercise of stock option - - - - 1,135 - -
Payment for repurchase of redeemable oridnary
shares
(18) - - - (18) - -
Payment for repurchase of convertible bonds - (99,440) - - (16) (299,271) (48,036)
Change of restricted cash (115,000) 417,670 (1,225) (197) (115,000) 55,324 8,880
Proceeds from short-term bank borrowings 1,045,751 968,467 100,627 16,152 3,322,480 2,661,172 427,147
Proceeds from long-term bank borrowings 116,515 6,457 - - 1,594,977 1,369,370 219,799
Payment of short term bank borrowings (886,711) (1,029,047) (398,245) (63,923) (1,877,148) (3,263,051) (523,756)
Payment for long term bank borrowings (20,000) (38,896) (111,536) (17,903) (350,000) (212,037) (34,034)
Payment of arrangement fee of long-term loans (42,586) (5,188) (2,596) (417) (42,586) (18,355) (2,946)
Payment of arrangement fee of short-term loans (5,625) (1,474) (128) (21) (5,625) (6,501) (1,043)
Net cash provided (used) by financing activities 92,310 218,549 (413,103) (66,309) 2,528,208 286,651 46,011
Net increase (decrease) in cash and cash equivalents 141,395 (182,101) (930,688) (149,386) 345,778 (1,300,079) (208,677)
Cash and cash equivalents at the beginning of period 1,835,160 1,789,265 1,607,164 257,968 1,630,777 1,976,555 317,259
Cash and cash equivalents at the end of period 1,976,555 1,607,164 676,476 108,582 1,976,555 676,476 108,582
Supplemental disclosure of cash flow information:
Interest paid (9,609) 51,848 26,421 4,241 54,828 164,536 26,410
Income tax paid 3,442 (10,331) 549 88 152,681 47,212 7,578
Realized gain/(loss) from derivative contracts (26,235) 3,243 790 127 (69,757) 21,059 3,380
Supplemental schedule of non-cash activities:
Acquisition of fixed assets included in accounts
payable, accrued expenses and other liabilities
85,371 (30,023) 30,816 4,946 446,314 (159,459) (25,595)

 

 

 

For the three months ended For the years ended
December 31, 2011 September 30, 2012 December 31, 2012 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2012
(RMB million) (RMB million) (RMB million) (US$ milllion) (RMB million) (RMB million) (US$ milllion)
Non-GAAP net loss (862.3) (301.9) (650.6) (104.4) (1,068.5) (1,468.3) (235.7)
Fair value changes of the conversion features of the Convertible bonds 33.3 1.2 1.4 0.2 264.4 (5.7) (0.9)
Accretion of interest of the Convertible bonds (30.2) (21.4) (21.2) (3.4) (97.5) (88.9) (14.3)
Unrecognized tax benefit 26.3 - - - - - -
Severance fee to previous senior management - - - - (32.6) - -
Tax impact of severance fee to previous senior management - - - - 4.1 - -
GAAP net loss (832.9) (322.1) (670.4) (107.6) (930.1) (1,562.9) (250.9)
For the three months ended For the years ended
December 31, 2011 September 30, 2012 December 31, 2012 December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2012
(RMB) (RMB) (RMB) (US$) (RMB) (RMB) (US$)
Non GAAP net loss per ADS - Basic (10.22) (3.57) (7.70) (1.24) (12.71) (17.39) (2.79)
Fair value changes of the conversion features of the Convertible bonds 0.39 0.01 0.02 0.01 3.14 (0.07) (0.01)
Accretion of interest of the Convertible bonds (0.36) (0.25) (0.25) (0.04) (1.16) (1.05) (0.17)
Unrecognized tax benefit 0.31 - - - - - -
Severance fee to previous senior management - - (0.38) - -
Tax impact of severance fee to previous senior management - - 0.05 - -
Net loss contributed to shareholders per ADS - Basic (9.88) (3.81) (7.93) (1.27) (11.06) (18.51) (2.97)
ADS (Basic) 84,335,246 84,451,184 84,513,057 84,513,057 84,065,140 84,433,501 84,433,501
For thee months ended Annualized for the three months ended For the twelve months ended For the twelve months ended
December 31, 2011 September 30, 2012 December 31, 2012 December 31, 2011 September 30, 2012 December 31, 2012 December 31, 2011 December 31, 2012
Non-GAAP Return on Equity -20.37% -9.62% -24.41% -81.48% -38.48% -97.64% -24.75% -47.80%
Fair value changes of the conversion features of the Convertible bonds 2.80% 1.21% 3.35% 11.20% 4.84% 13.40% 7.81% 5.99%
Accretion of interest of the Convertible bonds -0.64% -0.60% -0.69% -2.56% -2.40% -2.76% -2.05% -2.52%
Unrecognized tax benefit 0.56% - - 2.24% - - - 0
Severance fee to previous senior management - - - - - 0 -0.69% 0
Tax impact of severance fee to previous senior management - - - - - 0 0.09% 0
GAAP Return on equity -17.65% -9.01% -21.75% -70.60% -36.04% -87.00% -19.59% -44.33%

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