LDK Solar posted record revenues for the second quarter, resulting in significant increases in gross margin and net income. The PV manufacturer shipped nearly 20% more wafers and 136% more modules compared to the previous quarter, and increased its wafering capacity to 2.3GW in June. The company expects revenues for the third quarter to be slightly above those of the just-completed period and to near the $2 billion mark for the fiscal year.
Net sales for the second quarter of fiscal 2010 were $565.3 million, up 62.7% from the $347.6 million recorded for the first quarter of FY2010 and 147.6% from the $228.3 million posted in Q2 2009.
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Gross margin for the just-completed quarter was 18%, compared to 15.7% in Q1 FY2010 and negative 90% in the Q2 of last year.
Operating margin for the second quarter of fiscal 2010 was 13.9%, compared to 9.5% in Q1 of this year and negative 102.9% in the Q2 2009.
Net income for the latest quarter was $45 million, compared to $7.2 million for Q1 2010 and a net loss of $216.9 million for Q2 2009.
LDK Solar shipped 510.5MW of wafers during the second quarter, compared to 426.7MW in Q1 2010-a 19.6% increase.
The average selling price for wafers (excluding OEM sales) increased slightly quarter to quarter, rising from $0.83 to $0.85 per watt, but still well down from the $1.12/W price seen in Q2 2009.
On the module side, shipments more than doubled, reaching 73.9MW, compared to the previous quarter’s total of 31.3MW.
For the third quarter, LDK Solar estimates its revenue will be between $570 million and $600 million, with wafer shipments of 520-550MW and module shipments of 75-85MW.
For fiscal 2010, the company expects revenues to end up between $1.95 billion and $2.0 billion, with wafer shipments hitting 1.95-2.0GW and module shipments reaching 250-300MW.
Wafer sales are targeted to be a mix of 85% multicrystalline, 15% monocrystalline, with annual capacity reaching 2.6GW by Q4.
LDK’s nascent cell processing plan calls for 60MW of capacity online this month, doubling that to 120MW in the third quarter, and reaching 480MW by late 2011.
The company also said it will reduce its module processing costs by 10-15% over the course of 2010, with 1.5GW of capacity slated to come online by year’s end.
Chairman/CEO Xiaofeng Peng made the following statement in connection with the earnings announcement.
“We were very pleased to exceed expectations for the second quarter, which reflected the continued improvement in the operating environment for the solar industry and consistent execution by our team. Our business momentum remained strong across key metrics. We achieved record quarterly revenue, robust growth in wafer shipments, stable ASPs, and improved profitability.
“We continued to extend our leadership position in solar wafer production and ended the quarter with 2.3GW of annualized wafer capacity. We were pleased to achieve this wafer capacity expansion with minimal capital expenditure.
“Our vertical integration plan also continued to track well during the second quarter. Just one quarter after acquiring our crystalline module manufacturing plant, we more than doubled our module shipments sequentially. Demand for our modules remained robust and we signed two new supply contracts in Europe during the second quarter.
“Improving operating efficiencies and cost structure remain a top priority for the company. During the second quarter, profitability improved significantly as we continued to tightly manage expenses and pricing stabilized.
“We experienced an increasing contribution from our in-house polysilicon production. We produced nearly 1200MT of polysilicon in total between our 1000 MT plant, and the first 5000 MT train of our 15,000 MT plant during the quarter. We remain optimistic about the improving PV industry trends,” concluded Peng.
