Yingli Green Energy Holding Company Limited (NYSE:YGE), one of the largest vertically integrated photovoltaic manufacturers, reported increased revenue in 4Q10, but reported a small loss in net earnings due to a shrinking of margin, increased operating expenses and a currency exchange loss.
Total net revenues were RMB 2,530.9 million (US$370.8 million) in 4Q09, an increase of 13.7% from RMB 2,225.2 million in 3Q09 and an increase of 43.7% from RMB 1,761.2 million in 4Q08.
Net loss was RMB44.8 million (US$6.6 million) in 4Q09, compared to net income of RMB 120.8 million in 3Q09 and RMB 82.0 million in 4Q08. Diluted loss per ordinary share and per ADS was RMB 0.30 (US$0.04), compared to diluted earnings per ordinary share and per ADS of RMB 0.79 in 3Q09 and RMB 0.64 in 4Q08.
Operating margin was 4.4% in 4Q09, compared to 10.9% in 3Q09 and 5.6% in 4Q08.
Operating expenses were RMB 639.3 million (US$93.7 million), compared to RMB 257.5 million in 3Q09 and RMB 162.8 million in 4Q08. The company said the increase in operating expenses from previous quarters was primarily attributable to a non-cash impairment of intangible assets relating to long-term supply agreements of RMB 131.2 million (US$19.2 million) and a non-cash bad debt expense of RMB 184.3 million (US$27.0 million) related to settlements with two particular customers in the fourth quarter.
Foreign currency exchange loss was RMB 48.5 million (US$7.1 million), compared to a foreign currency exchange gain of RMB 71.8 million in 3Q09 and a foreign currency exchange gain of RMB 68.7 million in 4Q08. The foreign currency exchange loss in 4Q09 was primarily due to the depreciation of the Euro against the Renminbi.
Full Year Results
Total net revenues for the full year 2009 were RMB 7,254.9 million (US$1,062.8 million), compared to RMB 7,553.0 million for the full year 2008. PV module shipment volume for the full year 2009 was 525.3 megawatts (MW), an increase of 86.6% from 281.5 MW for the full year 2008.
Net loss was RMB 459.2 million (US$67.3 million) and fully diluted loss per ordinary share and per ADS was RMB 3.31 (US$0.48) for the full year 2009.
Outlook
Based on current market and operating conditions, estimated production capacity and forecasted customer demand, the Company expects its PV module shipment target to be in the estimated range of 950 MW to 1 GW for fiscal year 2010, which represents an increase of 80.8% to 90.4% compared to fiscal year 2009.
In addition, after taking into consideration the Company’s estimated blended cost of polysilicon in 2010, the expected average selling price of PV modules and forecasted exchange rates of the Euro and U.S. Dollar against the Renminbi, the Company currently expects that its gross margin target for fiscal year 2010 to be in the estimated range of 27% to 29%.
300 MW Expansion
In a separate release, Yingli Green Energy announced a 300 MW PANDA mono-crystalline silicon-based manufacturing capacity expansion project at its Baoding headquarters. The Company also announced a project loan of RMB 1.5 billion for the financing of this expansion project and a working capital credit facility of RMB 250 million, both granted by the Bank of Communications Co., Ltd., Hebei Branch (BOCOM).
Yingli is reportedly considering setting up its first North American manufacturing facility in Austin, Texas.
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