Suntech Power Holdings Co., Ltd. (NYSE:STP) , one of the world's leading manufacturers of photovoltaic (PV) cells and modules, today announced fourth quarter and full year 2007 financial results.
Fourth Quarter and Full Year 2007 Highlights(1)
-- Fourth quarter 2007 total shipments were approximately 110MW and total
net revenues grew 82.5% year-over-year to $397.5 million.
-- Full year 2007 total shipments were approximately 364MW and total net
revenues grew 125.1% year-over-year to $1,348.3 million.
-- On a non-GAAP(2) basis, Suntech's net income for the fourth quarter
2007 was $58.2 million or $0.34 per diluted American Depository Share
(ADS). Each ADS represents one ordinary share.
-- On a non-GAAP basis, Suntech's net income for the full year 2007 was
$201.0 million or $1.19 per diluted American Depository Share (ADS).
-- Suntech group's non-GAAP gross margin in its core Wafer-to-Module
business was 23.3% for the fourth quarter of 2007 and 23.6% for the
full year 2007.
-- Achieved second sequential quarter of positive operating cash flow due
to improved inventory management and cash management in the fourth
quarter of 2007.
-- Suntech's PV cell production capacity increased to 540MW as of year end
2007. The company is on track to reach 1GW PV cell production capacity
by the end of 2008.
"I am pleased to report healthy revenue growth and exceptional market demand for Suntech's solar products in the fourth quarter," said Dr. Zhengrong Shi, Suntech's Chairman and CEO. "We have a strong sales pipeline for the full year 2008 and expect robust demand to continue in 2009 as new solar markets in countries such as Italy, Greece and South Korea grow to complement demand in Germany, Spain and the U.S. Suntech is in a strong position to capitalize on this demand as we implement a range of cost reduction initiatives and we expect to simultaneously grow revenues and margins in 2009."
"In 2007, Suntech more than doubled revenues, successfully transitioned our 20% efficiency Pluto technology into pilot production, diversified our sales markets and expanded our product range. These achievements have laid a strong foundation for 2008 and we are confident that over the coming year our strategies for rapid capacity growth, low cost innovation, sales region and product diversification, and balanced silicon procurement will increasingly differentiate Suntech as a leading player in the solar industry," Dr. Shi concluded.
Commenting on Suntech's silicon supply, Dr. Shi said, "We successfully developed a strong silicon supply pipeline of 530MW for 2008. Suntech's silicon outlook for 2009 is even more promising. Due to the silicon supply contracts we signed in the fourth quarter with Asia Silicon (Qinghai), Nitol Solar, Renesola and a Korean conglomerate, we believe that our silicon costs will fall more than twice as fast as our projections of our average sales prices in 2009. We are confident that this will enable Suntech to expand production and improve profitability in 2009."
Suntech increased PV cell production capacity from 420MW at the end of the third quarter of 2007 to 540MW at the end of 2007. Dr. Shi commented, "Our current capacity expansion is on track to hit our stated goal of 1GW PV cell production capacity by the end of 2008. The majority of this expansion will occur in the second half of 2008. To optimize our production volume and margins, approximately 60% of our full year production target of 530MW will be produced in the second half of 2008."
Recent Business Highlights
Products and Projects
-- Suntech announced a license agreement with Akeena Solar to distribute
Akeena's state-of-the-art solar panel technology, Andalay, in Europe,
Japan and Australia. A valuable addition to Suntech's growing
portfolio of solar products, Suntech targets sales of over 10MW of the
Andalay solar panels to the licensed regions in 2008.
-- Suntech was granted the National Export Inspection Exemption by the
General Administration of Quality Supervision, Inspection and
Quarantine (AQSIQ) of the People's Republic of China. The export
inspection exemption is China's highest honor awarded to companies that
demonstrate exceptional internal product quality management and control.
Suntech is the first Chinese solar company to receive this national
-- Suntech supplied PV modules for a solar energy system on the roof of
the town hall in Genk, Belgium. The project was engineered by
Netherlands-based Oskomera Solar Power Solutions (OSPS) in
collaboration with Belgium-based ENECO Energie. The system was
constructed with approximately 1,260 Suntech solar modules with a
capacity of 239kW.
-- Suntech opened sales offices in Germany and Spain to strengthen its
European sales network and broaden Suntech's ability to serve customers.
Suntech expects these offices to increase the Company's ability to
respond to demands in these new markets, enhance customer relationships
and help build Suntech's market position.
-- Suntech opened a sales office in South Korea to accelerate its business
development efforts and customer service capabilities in Asia. Through
this new location, Suntech seeks to expand its collaborations with key
partners in South Korea and further solidify its position as a leading
supplier of PV modules in South Korea. With a growing sales team in
South Korea, the Company targets five-fold sales growth in that region
from 2007 to 2008.
Industry Support and Recognition
-- Dr. Zhengrong Shi was named one of China's Green Persons of the Year
for his outstanding contribution to environmental protection
initiatives and environmental awareness within China. The national
award, sponsored by seven Chinese government institutions, is China's
highest honor for those that make exceptional contributions to
-- Suntech hosted the 2007 Chinese PV Industry International
Competitiveness Forum on behalf of the China Renewable Energy
Association on December 12, 2007, in Wuxi, Jiangsu Province, China.
-- In November 2007, Suntech supported The Green Long March initiative to
promote increased understanding of environmental successes and
challenges in China, and encourage sustainable development.