April 18, 2013 - LDK Solar Co., Ltd. today reported its unaudited financial results for the fourth quarter ended December 31, 2012.
All financial results are reported in U.S. dollars on a U.S. GAAP basis.
Fourth Quarter Highlights:
Net sales of $135.9 million; and
Shipped 184.7 megawatts (MW) of wafers, 69.1MW of cells and modules in the fourth quarter.
Net sales for the fourth quarter of fiscal 2012 were $135.9 million, compared to $291.5 million for the third quarter of fiscal 2012, and $420.2 million for the fourth quarter of fiscal 2011.
Gross loss for the fourth quarter of fiscal 2012 was $82.2 million, compared to gross loss of $32.5 million in the third quarter of fiscal 2012, and gross loss of $275.2 million for the fourth quarter of fiscal 2011.
Gross margin for the fourth quarter of fiscal 2012 was negative 60.5%, compared to negative 11.2% in the third quarter of fiscal 2012, and negative 65.5% in the fourth quarter of fiscal 2011.
During the preparation of its fourth quarter 2012 financial results, LDK Solar's management determined that an inventory write-down of $25.1 million was required as a result of a continuous weakness in market price for polysilicon, wafers, cells, modules and PV projects caused by industry-wide over capacity and much heated market competition. As a result, gross margin and results from operations were negatively impacted in the fourth quarter of fiscal 2012.
Loss from operations for the fourth quarter of fiscal 2012 was $408.7 million, compared to loss from operations of $75.7 million for the third quarter of fiscal 2012, and loss from operations of $531.4 million for the fourth quarter of fiscal 2011. During the fourth quarter of 2012, LDK Solar's management determined that a provision for doubtful trade receivables and a loss on prepayments of $50.6 million was required in view of the deteriorating solar market which negatively affected our customers and suppliers, of which $12.1 million was incurred in our subsidiary located in Hefei City. The Company also made a non-cash provision totaling $46.7 million for an arbitration decision made against the Company by the China International Economic and Trade Arbitration Commission in favor of Beijing Jingyuntong Technology Co., Ltd..
During the fourth quarter of 2012, LDK Solar's management made the decision to sell its subsidiary in Hefei, Anhui Province. The assets and liabilities of this Hefei subsidiary were classified as held for sale and liabilities directly associated with assets classified as held for sale respectively, and $74.2 million of impairment loss on assets held for sale was recorded for the excess of carrying amount to fair value less cost to sell. Additionally, LDK Solar's management determined that an impairment loss for property, plant and equipment of $78.2 million and an impairment loss for goodwill and intangible assets of $26.7 million were required to reflect the decline in solar industry and change of business plan of certain production facilities.
Operating margin for the fourth quarter of fiscal 2012 was negative 300.8% compared to negative 26.0% in the third quarter of fiscal 2012, and negative 126.5% in the fourth quarter of fiscal 2011.
Income tax expense for the fourth quarter of fiscal 2012 was $73.5 million, compared to income tax benefit of $25.4 million in the third quarter of fiscal 2012 and income tax benefit of $45.1 million in the fourth quarter of fiscal 2011. The increase in income tax expense during the fourth quarter of fiscal 2012 was mainly because of a valuation allowance for deferred tax assets.
Net loss available to LDK Solar's shareholders for the fourth quarter of fiscal 2012 was $517.0 million, or a loss of $3.68 per diluted ADS, compared to net loss of $136.9 million, or a loss of $1.08 per diluted ADS for the third quarter of fiscal 2012 and net loss of $588.7 million, or a loss of $4.63 per diluted ADS for the fourth quarter of fiscal 2011. The weighted average number of shares for calculating diluted ADS was approximately 140.4 million for the fourth quarter of fiscal 2012.
LDK Solar ended the fourth quarter of fiscal 2012 with $98.3 million in cash and cash equivalents and $167.2 million in short-term pledged bank deposits.
"Our business continued to be affected by the significant challenges that remained pervasive throughout the solar industry," stated Xingxue Tong, President and CEO of LDK Solar. "Our fourth quarter results reflect the industry-wide overcapacity and resulting pressure to ASP's and margins. Amidst these challenging market conditions, we are dedicated to working closely with our stakeholders and the relevant governmental agencies to adapt our strategy to position LDK Solar for recovery and long-term growth.
"In 2013, we are focused on emerging solar markets in China, Africa, India and the United States. We believe these markets represent the strongest growth potential. We will also continue to focus on improving our cost structure by further driving down production costs and tightly managing our operating expenses. While the weak demand environment is expected to persist in the near-term, we continue to believe that the considerable opportunities to meet global energy needs with solar power will drive long-term market growth," concluded Mr. Tong.
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 first quarter of fiscal 2013, LDK Solar estimates its revenue to be in the range of $80 million to $100 million, wafer shipments between 260MW and 270MW and cell and module shipments between 30MW and 40MW.