According to Samuel Yang, CEO of JA Solar, the first quarter of 2009 was the ‘most challenging quarter’ the company has faced since its formation in 2005. Revenue in the first quarter of 2009 was US$33.9 million a 79.4% decline compared to US$143.3 million reported in the fourth quarter of 2008. The company made a loss of $20.9 million in the quarter due to lower than expected sales and higher operating costs.
“The global industry conditions were particularly difficult, with the market affected by worse than normal seasonality, a weak macro-economic environment and the continuing impact of the credit crisis resulting in some issues with customer project financing,” commented Yang. “However, we are actively managing our business to prepare for what we hope to be the market’s recovery in the latter part of this year and we are seeing encouraging signs of market improvement in key end markets.
JA Solar declined to give revenue and production guidance for 2009, due to lack of visibility, but noted that it was unlikely to achieve the results previously given in its 2009 guidance. The company also declined to give specific cost-per-watt figures going forward due to competitive reasons, but claimed they still had the lowest in the industry. JA Solar said that its cost-per-watt levels were significantly higher than normal due to the very low utilization rates.
JA Solar’s 2009 guidance was for revenue of between US$830 million to US$952 million and production output of 500 MW to 550 MW. Its sales pipeline for 2009 was put at approximately 400MW at the end of the quarter. Capital spending is not expected to be adjusted from the planned US$50 million, the company said in a conference call with financial analysts.
Capacity reached 650MW in 1Q09 and is still on track to reach 875MW by year-end. The majority of the tools required for the capacity expansion had already been paid for, the company said.
JA Solar noted that sales in Europe had been particularly weak in the first quarter due to customers having to meet ‘take or pay’ obligations with other companies and had little or any funds for purchases with JA Solar.
Its biggest customer in the quarter was BP Solar, responsible for approximately 25% of revenue, which also included tolling business. Tolling actually represented 29% of revenue in the quarter.