World Cup sponsor Yingli Green Energy posted strong revenue, gross margin, and net income numbers in the second quarter, with sequential increases shown across the board. The vertically integrated Chinese solar manufacturer said it experienced a substantial increase in PV module shipments during the period ended June 30 and still expects to hit between 950MW and 1GW in total panel shipments for 2010.
Second-quarter net revenues reached RMB2,699.6 million ($398.1 million), a 10.2% increase from Q1’s RMB2,449.9 million ($358.9 million). The company attributed the increase to a midteen growth rate in the shipment volume of its Yingli Solar-branded PV modules, which was partially offset by the depreciation of the Euro against the Chinese currency.
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Gross margin during the second quarter hit a record 33.5%, compared with 33.3% in the previous period and 19.8% in Q2 2009. Yingli said the improved gross margin was primarily due to the better-than-expected average selling price and continuous decline in the blended cost of polysilicon, decreasing polysilicon usage per watt, and continuous reduction in nonpolysilicon cost (although it did not call out those cost and usage numbers in its official press release).
Net income rose to RMB217.8 million ($32.1 million) during the second quarter, compared to RMB190.9 million ($28 million) in the first quarter. The adjusted non-GAAP-based Q2 net income came in at RMB261 million ($38.5 million) in the second quarter of 2010, compared to income of RMB246.8 million ($36.2 million).
The company reaffirmed its PV module shipment guidance target to be in the 950MW-1GW range for 2010, an increase of 80.8% to 90.4% compared to FY2009.
Based on the strong gross margin performance in the first half of 2010, the estimated ramp-up cost of Fine Silicon, the 400MW of new production capacities put into initial operation in July 2010, the expected average selling price of PV modules, and the forecasted exchange rates of the Euro and U.S. dollar against the Renminbi, the company hiked its estimated gross-margin target range from 27-29% to 28-30% for the year.
Chairman/CEO Liansheng Miao issued the following statement in conjunction with Yingli’s earnings announcement.
“The past few months have been very exciting for us in many ways. In the second quarter of 2010, we achieved a midteen-percent sequential increase in PV module shipment volume and realized a record high gross margin of 33.5%.
“In addition to delivering solid operational results, the company also reached important milestones on many other fronts. In terms of marketing, our 2010 FIFA World Cup sponsorship has made a huge splash. As the market for distributed electricity generation is expanding in many major solar markets, the power to influence and decide the solar industry’s future is rapidly vesting to the general public.
“We believe our groundbreaking 2010 FIFA World Cup sponsorship project, accompanied by a series of marketing initiatives, has effectively boosted our brand recognition both within and outside of the conventional solar community, which is expected to greatly enhance our competitive advantages in this new era. Furthermore, supported by our reliable products and services, we expect to enjoy a pricing premium and receive stronger demand as a result of our ever-increasing brand equity.
“On the research and technology front, we have commenced initial production of 300MW Panda high-efficiency solar cells in July 2010, merely 13 months from conceptualizing the project. In parallel, we have successfully enhanced Panda cell conversion efficiency rate to 19% on the pilot line, and have kicked off collaboration with Innovalight to boost the average efficiency of our multicrystalline silicon based solar cells. All these efforts demonstrate our aspiration to technological advancement and our commitment to bringing the benefits of cutting-edge technologies to our valued customers.
“I’m also excited to report another significant operating milestone. Fine Silicon, our polysilicon manufacturing facility with a designed annual production capacity of 3000 metric tons, has successfully commenced commercial operation since earlier this month. We expect this achievement to further strengthen our leadership as one of the world’s largest vertically integrated PV manufacturers.
“Last but not least, we are encouraged by our accomplishments in markets around the globe. In Europe, we are fully stretched to satisfy our existing customer base and to continue to attract new customers in high-growth emerging markets such as France, Italy, Czech Republic, Greece, and the United Kingdom.
“In North America, our sales network has expanded into 18 states in the U.S., as well as Canada and the Caribbean, and we have become the leading supplier of PV modules in New Jersey and California. We have also been making progress in the rooftop and ground-mounted segments and were recently selected for a number of high-profile projects on both the West and the East coasts.
“In China, we are enhancing our strategic cooperative relationships with utility companies in various concession bidding projects in order to further expand our footprints.
“For all the reasons stated above, we are confident in our prospects for a strong second half of the year,” Miao concluded.
