LDK Solar shipments, sales and losses improve in Q3

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LDK Solar has reported increased shipments, higher revenue and reduced losses for the third quarter of 2013, while cash levels also improved by approximately US$10 million after plummeting to only US$85.1 million in the previous quarter.

The company reported net sales of US$156.6 million, compared to US$114.7 million for the second quarter of 2013.

The improving financial position was primarily driven by increased wafer shipments, which came in at the low end of guidance at 384.7MW, up from 303.9MW in the prior quarter.

Module and cell shipments also increased from 35.3MW in the second quarter to 78.4MW in the third quarter.

Ongoing restructuring activities and continued shutdown of LDK's facilities, including its polysilicon production plants, helped reduce operating losses in the quarter to US$77.5 million, compared to US$95.1 million in the previous quarter.

Gross loss for the quarter was US$37.6 million, compared to US$53.8 million in the second quarter, while gross margin was negative 24.0%, compared to negative 46.9% in the second quarter of 2013.

“Our third quarter results were in line with expectations,” said Sam Tong, president and CEO of LDK Solar.  “We were pleased to deliver 37% sequential revenue growth and reduce our net loss available to LDK Solar's shareholders both sequentially and on a year-over-year basis. We saw some signs of further improvement in the PV market during the quarter. While European PV markets remained soft, we experienced increased demand from China, North America and other emerging solar markets.”

Fourth quarter guidance

LDK Solar said that it expected further recovery in its sales and shipments in the fourth quarter of 2013. The company guided revenue to be in the range of US$200 million to US$250 million, while wafer shipments would increase to between 480MW and 520MW. Solar cell and module shipments would also increase to between 120MW and 160MW.

However, the company separately said that it had entered into a new two-week forbearance arrangement with a majority of bondholders over its partial default to attempt to arrange an agreement on payment extensions as well as unpaid interest instalments.

“During the quarter, we continued to pursue a number of initiatives focused on restructuring our business operations and on our liability management. While the onshore syndicate facility will alleviate some of our onshore operating cash flow pressure in Jiangxi Province, our offshore value and cash flow are insufficient to solve even our short-term liquidity associated with our offshore indebtedness. We are working closely with our stakeholders and relevant advisors to negotiate a consensual solution to our offshore debt obligations,” added Tong from the company’s third quarter financial statement on the matter.

A syndicate of 11 commercial banks in China have recently provided LDK Solar with a RMB1.56 billion (US$256 million) credit facility that has strict uses and supervision and are only allocated for use to finance LDK’s onshore operations within Jiangxi Province.

SPI Solar

Majority-owned EPC subsidiary, SPI Solar also reported better than expected results. Total net sales for the third quarter of 2013 were US$21.2 million, up from only US$4.2 million the prior quarter, due primarily to its parent company’s financial position and inability to secure modules for planned projects.

However the subsidiary also made a loss of US$3.5 million, compared with a loss of US$7.2 million in the second quarter of 2013.

“The sequential improvement in total net sales was primarily the result of the completion of a Greece project and resumption of construction starts with KDC Solar in New Jersey for the previously announced Imclone project,” said Charlotte Xi, president and global chief operating officer and interim chief financial officer of SPI Solar. “While these projects have begun to move forward, prospects for new projects beyond the current pipeline continue to be impacted by financial lending and solar industry conditions in general.”

The company also noted that it was still in negotiations with China Development Bank (CDB), in efforts to reinstate financing for the company’s global EPC business.

“We are encouraged by our ongoing dialogue with CDB and are hopeful that this will result in the reinstatement of financing for current and future projects,” said Min Xiahou, global chief executive officer of SPI. “In addition, as overall conditions in the solar industry and for SPI Solar improve — particularly for the availability of financing — we are excited by the potential to build out projects that we own in Hawaii while exploring how SPI Solar may seek additional business opportunities in China under the new management team.”

However, due to the ongoing financial woes, SPI Solar did not provide guidance for the fourth quarter. Yet, management said that the company was planning to re-introduce its YES! brand of low-cost solar PV kits for the US residential market.

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