SEOUL, South Korea,
Nov. 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 third quarter ended
September 30, 2017. The Company will
host a conference call to discuss the results at 8:00 am Eastern Time (10:00 pm Korea Standard Time) on November 10, 2017.
Third Quarter 2017 Highlights
- Net revenues were $543.0 million,
compared with $577.7 million in the
second quarter of 2017 and $707.8
million in the third quarter of 2016.
- Gross margin was 11.6%, compared with 11.6% in the second
quarter of 2017 and 19.9% in the third quarter of 2016.
- Operating income was $10.6
million, compared with operating income of $20.1 million in the second quarter of 2017 and
operating income of $72.4 million in
the third quarter of 2016.
- Net income attributable to Company's ordinary shareholders was
$5.0 million, compared with net
income of $18.7 million in the second
quarter of 2017 and net income of $41.7
million in the third quarter of 2016.
- Earnings per fully diluted American Depositary Share ("ADS" and
each ADS represents 50 of the Company's ordinary shares) were
$0.06, compared with earnings per
fully diluted ADS of $0.22 in the
second quarter of 2017 and earnings per fully diluted ADS of
$0.50 in the third quarter of
2016.
Mr. Jay Seo, CFO of Hanwha Q
CELLS, said that the Company's "third quarter results were in-line
with the Company's guidance set forth in Q2," and that the downward
pressure on gross margin, caused primarily by increasing wafer
prices, was partially off-set by cell and module processing cost
reduction."
Mr. Moon Seong Choi, the
Company's new SVP of Corporate Planning, commented that the Company
will have a total of 8GW of nameplate module capacity at year-end
when including Hanwha Q CELLS Korea's manufacturing capacity. Mr.
Choi discussed the expected impacts of Section 201, stating that
the utility segment demand in the U.S. is not expected to decrease
drastically following the ITC recommendation which was less than
the remedies requested by the petitioners.
Third Quarter 2017 Results of Operations
Net Revenues
- Total net revenues were $543.0
million, down 6.0% from $577.7
million in the second quarter of 2017 and down 23.3% from
$707.8 million in the third quarter
of 2016.
Gross Profit and Margin
- Gross profit in the third quarter of 2017 was $63.2 million, compared with $67.2 million in the second quarter of 2017 and
$140.5 million in the third quarter
of 2016.
- Gross margin in the third quarter of 2017 was 11.6%, compared
with 11.6% in the second quarter of 2017 and 19.9% in the third
quarter of 2016.
Income from Operations and Operating Margin
- Income from operations in the third quarter of 2017 was
$10.6 million, compared with
$20.1 million in the second quarter
of 2017 and $72.4 million in the
third quarter of 2016.
- Operating margin in the third quarter of 2017 was 2.0%,
compared with 3.5% in the second quarter of 2017 and 10.2% in the
third quarter of 2016.
- Total operating expenses were $52.6
million in the third quarter of 2017, up 11.7% from
$47.1 million in the second quarter
of 2017 and down 22.8% from $68.1
million in the third quarter of 2016.
- Selling and marketing expenses were $30.6 million in the third quarter of 2017, up
3.7% from $29.5 million in the second
quarter of 2017 and down 15.9% from $36.4
million in the third quarter of 2016.
- General and administrative expenses were $17.4 million in the third quarter of 2017, up
28.9% from $13.5 million in the
second quarter of 2017 and down 11.7% from $19.7 million in the third quarter of 2016.
- Research and development expenses were $4.6 million in the third quarter of 2017, up
12.2% from $4.1 million in the second
quarter of 2017 and down 61.7% from $12.0
million in the third quarter of 2016.
Net Interest Expense
- Net interest expense was $10.0
million in the third quarter of 2017, compared with
$9.2 million in the second quarter of
2017 and $12.4 million in the third
quarter of 2016.
Foreign Currency Exchange Gain (Loss)
- Net foreign currency exchange gain was $7.3 million in the third quarter of 2017,
compared with a gain of $7.1 million
in the second quarter of 2017 and a loss of $2.3 million in the third quarter of 2016.
Gain (loss) on Change in Fair Value of Derivative
Contracts
- The Company recorded a net loss of $0.6
million in the third quarter of 2017 from the change in fair
value of derivatives in hedging activities, compared with a net
loss of $3.0 million in the second
quarter of 2017 and a net loss of $2.1
million in the third quarter of 2016.
Income Tax Expense (Benefit)
- Income tax expense was $2.5
million in the third quarter of 2017, compared with an
income tax benefit of $3.0 million in
the second quarter of 2017 and an income tax expense of
$10.3 million in the third quarter of
2016.
Net Income (Loss) and Earnings (Loss) per ADS
- Net income attributable to Company's ordinary shareholders was
$5.0 million in the third quarter of
2017, compared with net income of $18.7
million in the second quarter of 2017 and net income of
$41.7 million in the third quarter of
2016.
- Earnings per fully diluted ADS on a GAAP basis were
$0.06 in the third quarter of 2017,
compared with $0.22 in the second
quarter of 2017 and $0.50 in the
third quarter of 2016.
Third Quarter 2017 Financial Position
As of September 30, 2017, the
Company had cash and cash equivalents of $245.6 million, compared with $331.0 million as of June
30, 2017. The restricted cash as of September 30, 2017 was $113.4 million, compared with $95.0 million as of June
30, 2017.
As of September 30, 2017, accounts
receivable was $391.1 million,
compared with $358.4 million, as of
June 30, 2017. Inventories were
$350.7 million as of September 30, 2017, compared with $337.2 million as of June
30, 2017.
As of September 30, 2017, accounts
payable was $429.2 million, compared
with $407.8 million, as of
June 30, 2017.
Total short-term bank borrowings (including the current portion
of long-term bank borrowings) were $744.1
million, an increase of $108.6
million from the second quarter of 2017, due to proceeds
from additional borrowings in China.
As of September 30, 2017, the
Company had total long-term debt (net of current portion and
long-term notes) of $336.8 million,
an increase of $0.7 million from the
second 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 $26.6
million in the third quarter of 2017.
Operations Updates
Production Capacity
As of September 30, 2017, the
Company's in-house, annualized production capacities were 1,600 MW
for ingot, 1,050 MW for wafer, 4,300 MW for cell and 4,300 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, 4,300
MW for cell and 4,300 MW for module.
Furthermore, the Company has additional module availability of
up to 2,100 MW (annualized) as of September
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
3,700 MW by year-end.
Business Outlook
Fourth Quarter and Full Year 2017 Guidance
For the fourth quarter of 2017, the Company estimates net
revenues in the range of $610 million to
$630 million.
For the full year 2017, the Company reiterates its previous
guidance of:
- Total module shipments in the range of 5,500 to 5,700 MW
- Revenue-recognized module shipments in the range of 5,300 to
5,500 MW
- Capital expenditures of approximately $70 million for manufacturing technology upgrades
and certain R&D related expenditures
Conference Call
The Company will host a conference call to discuss the results
at 8:00 am Eastern Time (10:00 pm Korea Standard Time) on November 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
6713-5090
|
United
States
|
+1
(845)675-0437
|
South
Korea
|
+82
2-6490-3660
|
Germany
|
08001820671
|
United
Kingdom
China,
Domestic
Hong Kong
|
+44
2036214779
4006208038 /
8008190121
+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
|
00798-6136-1602
|
Germany
United
Kingdom
|
08001802149
08082340072
|
China,
Domestic
Hong Kong
|
8008700206 /
4006322162
800963117
|
Conference ID: 63369727
Replay time period: November 10,
2017 11:00 ET - November 18,
2017 07:59 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
its 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.
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SOURCE Hanwha Q CELLS Co., Ltd.