XINYU CITY, China and SUNNYVALE, Calif., Aug. 29, 2011 /PRNewswire/ -- LDK Solar Co., Ltd. ("LDK Solar"; NYSE: LDK), a leading vertically integrated manufacturer of photovoltaic products, today reported its unaudited financial results for the second quarter ended June 30, 2011.
All financial results are reported in U.S. dollars on a U.S. GAAP basis.
Second Quarter Highlights:
Net sales of $499.4 million, a decrease of 34.8% sequentially and a decrease of 11.6% year-over-year;
Shipped 429.2 MW of wafers, 79.4 MW of modules in the second quarter;
Produced a total of approximately 2,774 MT of polysilicon during the second quarter; and
Produced a total of approximately 123 MW of cells during the second quarter
Net sales for the second quarter of fiscal 2011 were $499.4 million, compared to $766.3 million for the first quarter of fiscal 2011, and $565.3 million for the second quarter of fiscal 2010.
Gross profit for the second quarter of fiscal 2011, was $11.0 million, compared to $241.6 million in the first quarter of fiscal 2011, and $101.8 million for the second quarter of fiscal 2010.
During the preparation of its second quarter 2011 financial results, LDK Solar's management determined that an inventory write-down of $52.9 million was required as a result of the significant drop in market price for wafers and modules during the second quarter. As a result, gross margin and results from operations were negatively impacted in the second quarter of fiscal 2011.
Gross margin for the second quarter of fiscal 2011 was 2.2%, compared to 31.5% in the first quarter of fiscal 2011 and 18.0% in the second quarter of fiscal 2010.
Loss from operations for the second quarter of fiscal 2011 was $47.9 million, compared to income from operations of $196.1 million for the first quarter of fiscal 2011, and $78.6 million for the second quarter of fiscal 2010.
Operating margin for the second quarter of fiscal 2011 was negative 9.6% compared to positive 25.6% in the first quarter of fiscal 2011 and 13.9% in the second quarter of fiscal 2010.
Income tax expense for the second quarter of fiscal 2011 was $6.7 million, compared to income tax expense of $44.2 million in the first quarter of fiscal 2011 and income tax expense of $7.7 million in the second quarter of fiscal 2010.
Net loss attributable to LDK Solar's shareholders for the second quarter of fiscal 2011 was $87.7 million, or a loss of $0.62 per diluted ADS, compared to net income of $135.4 million, or $0.95 per diluted ADS for the first quarter of fiscal 2011 and $45.0 million, or $0.36 per diluted ADS for the second quarter of fiscal 2010. The number of shares for calculating diluted ADS was approximately 140.7 million for the second quarter of fiscal 2011.
LDK Solar ended the second quarter of fiscal 2011 with $636.4 million in cash and cash equivalents and $515.3 million in short-term pledged bank deposits.
"Our second quarter results reflect the challenging solar industry dynamics that resulted from recent policy revisions in Europe and consequently reduced demand for PV products," stated Xiaofeng Peng, Chairman and CEO of LDK Solar. "Lower pricing across the supply chain negatively impacted our financial results for the quarter.
"In recent weeks, we have seen average selling prices begin to stabilize and improvement to order patterns. We have continued to gain traction in expanding our presence in key markets such as North America and China. In the U.S., our recently established sales and marketing operation has already begun to gain traction in winning large module contracts. In China, we are encouraged by the announcement of the unified national feed-in-tariff program. We have an established, strong market position in our domestic market and see significant long-term growth opportunities.
"We are actively taking steps to improve our cost structure and strengthen our balance sheet. We continue to make progress on lowering our manufacturing costs as we gain scale in our newer PV product areas such as solar cells. Going forward, based on our current pipeline of business, we believe growth will resume in the second half of 2011," concluded Mr. Peng.
Business Outlook
The following statements are based upon management's current expectations. These statements are forward-looking in nature, and the actual results may differ materially. You should read the "Safe Harbor Statement" below with respect to the risks and uncertainties relating to these forward-looking statements.
For the third quarter of fiscal 2011, LDK Solar estimates its revenue to be in the range of $630 million to $680 million with wafer shipments between 350 MW and 400 MW, and module shipments between 250 MW and 300 MW, in-house polysilicon production between 2,600 MT and 2,700 MT, in-house cell production between 200 MW and 220 MW and gross margin between 11% and 16%.
For fiscal 2011, LDK Solar estimates its revenue to be in the range of $2.5 to $2.7 billion, wafer shipments between 1.8 gigawatts (GW) and 2.0 GW, module shipments between 750 MW and 800 MW, in-house polysilicon production between 10,000 MT and 11,000 MT, in-house cell production between 600 MW and 700 MW and gross margin between 15% and 20%.
Conference Call Details
The LDK Solar Second Quarter 2011 teleconference and webcast is scheduled to begin at 8:00 a.m. Eastern Time (ET), on August 29, 2011. To listen to the live conference call, please dial 877-941-1427 (within U.S.) or 480-629-9664 (outside U.S.) at 8:00 a.m. ET on August 29, 2011. An audio replay of the call will be available through September 5, 2011, by dialing 800-406-7325 (within U.S.) or 303-590-3030 (outside U.S.) and entering the pass code 4463854#.