JA Solar Announces Third Quarter 2013 Results

SHANGHAI, China, Nov. 26, 2013 (GLOBE NEWSWIRE) -- JA Solar Holdings Co., Ltd. (Nasdaq:JASO) ("JA Solar" or the "Company"), one of the world's largest manufacturers of high-performance solar power products, today announced its unaudited financial results for its third quarter ended September 30, 2013.

Third Quarter 2013 Highlights

• Shipments were 500.2 MW, consisting of 305.0 MW of modules and module tolling, and 195.2 MW of cells and cell tolling, above the high end of the Company's previous guidance of 470 MW and an increase of 7.9% from the second quarter of 2013
• Net revenue was RMB 1.8 billion ($287.3 million), compared to RMB 1.6 billion ($258.9 million) in the second quarter of 2013
• Gross margin was 11.3%, compared to gross margin of 8.1% in the second quarter of 2013
• Operating loss was RMB 31.6 million ($5.2 million), compared to operating loss of RMB 33.3 million ($5.4 million) in the second quarter of 2013
• Net loss, which included a non-cash change in fair value of warrant derivatives of RMB 138.3 million ($22.6 million), was RMB 227.0 million ($37.1 million), compared to net loss of RMB 132.4 million ($21.6 million) in the second quarter of 2013
• Loss per diluted ADS was RMB 6.77 ($1.11), compared to loss per diluted ADS of RMB 3.58 ($0.59) in the second quarter of 2013
• Cash, cash equivalents and restricted cash at the end of the quarter were RMB 2.5 billion ($401.1 million), compared to RMB 2.2 billion ($355.8 million) at the end of the second quarter of 2013
• Operating cash flow was positive RMB 623.4 million ($101.9 million), compared to positive RMB 503.5 million ($82.3 million) in the second quarter of 2013
• Non-GAAP net loss¹ attributable to the Company's ordinary shareholders in the third quarter of 2013 was RMB 90.2 million ($14.7 million), compared to a non-GAAP net loss attributable to the Company's ordinary shareholders of RMB 138.8 million ($22.7 million) in the second quarter of 2013
• Non-GAAP loss per diluted ADS was RMB 2.24 ($0.37), compared to Non-GAAP loss per diluted ADS of RMB 3.58 ($0.59) in the second quarter of 2013

Mr. Baofang Jin, executive chairman and CEO of JA Solar, commented, "We posted a solid performance in the third quarter, with shipments exceeding the high end of our guidance, owing to an improvement in the macro environment and increased installation activity across key markets. Thanks to a much healthier supply-demand balance and our continued cost-reduction efforts, our gross margin returned to double digits, while our prudent management of costs and receivables allowed us to post strong operating cash flow of over $100 million."

Mr. Jin continued, "We are encouraged by shipment growth across key geographies. In the third quarter, we made tremendous progress in the U.S. market, where our module shipments more than tripled sequentially. We also saw healthy shipment growth in China, where installation activity increased rapidly as buyers rushed to place orders ahead of an expected reduction in solar feed-in-tariff rates. Alongside this, we maintained our strong position in Japan, where we expect to have a healthy growth trajectory going forward.

"Prudent balance sheet management through the downturn in the solar industry helped to secure the long-term health of our business," Mr. Jin added. "Now that the market is showing significant signs of improvement, we are confident that our superior product offering and bankable brand will enable us to strengthen our market position. Looking to 2014, we will continue to stringently manage our production costs and focus on gaining market share in emerging markets. We are confident that this strategy will lead to an overall improvement in our bottom-line performance in the coming quarters."

Third Quarter 2013 Financial Results

Total shipments in the third quarter of 2013 were 500.2 MW, above the high end of the Company's previously provided guidance of 450 MW to 470 MW. This represents a 7.9% increase from 463.7 MW in the second quarter of 2013 and a 19.7% increase from 417.8 MW in the third quarter of 2012.

Revenue in the third quarter of 2013 was RMB 1.8 billion ($287.3 million), an increase of 11.0% from RMB 1.6 billion ($258.9 million) in the second quarter of 2013 and an increase of 7.2% from RMB 1.6 billion ($268.0 million) reported in the third quarter of 2012.

Gross profit in the third quarter of 2013 was RMB 198.7 million ($32.5 million), compared with gross profit of RMB 128.7 million ($21.0 million) in the second quarter of 2013 and a gross loss of RMB 96.6 million ($15.8 million) in the third quarter of 2012. Gross margin was 11.3% in the third quarter of 2013, compared with 8.1% in the second quarter of 2013 and negative 5.9% in the third quarter of 2012. The sequential increase in gross margin was primarily due to the Company's stringent cost-reduction initiatives.

Total operating expenses in the third quarter of 2013 were RMB 230.4 million ($37.6 million), compared with RMB 161.9 million ($26.5 million) in the second quarter of 2013 and RMB 534.6 million ($87.4 million) in the third quarter of 2012. The increase in total operating expenses quarter over quarter was primarily due to an accounts receivable provision of RMB 45.7 million ($7.5 million) in the third quarter of 2013 and an increase in transportation expenses in line with the increase in total shipments.

Operating loss in the third quarter of 2013 was RMB 31.6 million ($5.2 million), compared with an operating loss of RMB 33.3 million ($5.4 million) in the second quarter of 2013 and an operating loss of RMB 631.3 million ($103.1 million) in the third quarter of 2012. Operating margin in the third quarter of 2013 was negative 1.8%, compared with negative 2.1% in the second quarter of 2013 and negative 38.5% in the third quarter of 2012.

Change in fair value of warrant derivatives in the third quarter of 2013 was RMB 138.3 million ($22.6 million), compared with nil in the second quarter of 2013 and nil in the third quarter of 2012. The change in fair value of warrant derivatives was related to the change in fair value of certain warrants granted to certain investors in a registered direct offering closed on August 16, 2013.

Other income in the third quarter of 2013 was RMB 8.2 million ($1.3 million), compared with other loss of RMB 8.3 million ($1.4 million) in the second quarter of 2013 and other income of RMB 363.7 million ($59.4 million) in the third quarter of 2012.

Loss per diluted ADS in the third quarter of 2013 was RMB 6.77 ($1.11), compared with loss per diluted ADS of RMB 3.58 ($0.59) in the second quarter of 2013 and loss per diluted ADS of RMB 9.55 ($1.56) in the third quarter of 2012.

Non-GAAP net loss attributable to the Company's ordinary shareholders in the third quarter of 2013 was RMB 90.2 million (US$14.7 million), compared with a non-GAAP net loss attributable to the Company's ordinary shareholders of RMB 138.8 million ($22.7 million) in the second quarter of 2013 and a non-GAAP net loss attributable to the Company's ordinary shareholders of RMB 371.4 million ($60.7 million) in the third quarter of 2012.

Non-GAAP loss per diluted ADS in the third quarter of 2013 was RMB 2.24 ($0.37), compared with non-GAAP loss per diluted ADS of RMB 3.58 ($0.59) in the second quarter of 2013 and non-GAAP loss per diluted ADS of RMB 9.55 ($1.56) in the third quarter of 2012.

In the third quarter of 2013, the Company generated operating cash flow of RMB 623.4 million ($101.9 million).

Liquidity

As of September 30, 2013, the Company had cash, cash equivalents and restricted cash of RMB 2.5 billion ($401.1 million), compared to RMB 2.2 billion ($355.8 million) at the end of the second quarter of 2013.

As of September 30, 2013, total working capital was RMB 695.8 million ($113.7 million), compared with RMB 684.6 million ($111.9 million) as of June 30, 2013.

As of September 30, 2013, total short-term bank borrowings were RMB 983.7 million ($160.7 million), compared to RMB 672.4 million ($109.9 million) as of June 30, 2013.

As of September 30, 2013, total long-term bank borrowings were RMB 2.9 billion ($467.4 million), of which RMB 1.4 billion ($236.1 million) were due in one year. This compares to total long-term bank borrowings as of June 30, 2013 of RMB 3.5 billion ($578.5 million), of which RMB 2.0 billion ($329.0 million) were due in one year.

Recent Business Developments

On August 14, 2013, the Company announced that it has entered into a Securities Purchase Agreement with a single institutional investor (the "Investor") to issue securities in a registered direct offering (the "Offering"). In the Offering, the Company issued to the Investor American Depositary Shares, a "Series A-1 Warrant," a "Series A-2 Warrant," a "Series A-3 Warrant" and a "Series B Warrant." Between November 13, 2013 and November 15, 2013, the Series A-1 Warrant was exercised in full with 2,544,833 American Depositary Shares issued at a price of $9.43 per ADS, resulting in gross proceeds of $24.0 million to the Company.

Business Outlook

For the fourth quarter of 2013, the Company expects total cell and module shipments to be between 500 MW and 550 MW. For the full year 2013, the Company revises upwards its previous shipment guidance of between 1.7 GW and 1.9 GW to between 1.9 GW and 1.95 GW.

Investor Conference Call / Webcast Details

A conference call has been scheduled for today, Tuesday, November 26, 2013, at 8:00 a.m. U.S. Eastern Time (9:00 p.m. Beijing/Hong Kong Time). The call may be accessed by dialing +65-6723-9381 (international), +1-845-675-0437 (U.S.), or +852-2475-0994 (Hong Kong). The passcode is "JA Solar." A live webcast of the conference call will be available on the Company's website at www.jasolar.com. A replay of the call will be available beginning two hours after the live call and will be accessible by dialing +61-2-8199-0299 (international) or +1-646-254-3697 (U.S.). The passcode for the replay is 10762935.

Use of Non-GAAP Financial Measures

To supplement its consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), JA Solar uses certain non-GAAP financial measures, including non-GAAP net income (loss), non-GAAP earnings (loss) per share, non-GAAP earnings (loss) per ADS, and non-GAAP diluted weighted average ordinary shares outstanding, which are adjusted from the comparable GAAP results to exclude (1) changes in fair value of certain warrants granted to certain investors in a registered direct offering (the "Offering") closed on August 16, 2013, (2) fair value of such warrants exceeding net proceeds from the Offering, and (3) changes in fair value of embedded derivatives underlying the convertible notes issued in May 2008.

The Company believes that the use of non-GAAP information is useful for analysts and investors to evaluate JA Solar's current and future performances based on a more meaningful comparison of net income and diluted net income per ADS when compared with its peers and historical results from prior periods. These measures are not intended to represent or substitute numbers as measured under GAAP. The submission of non-GAAP numbers is voluntary and should be reviewed together with GAAP results.

Currency Convenience Translation

The conversion of Renminbi into U.S. dollars in this release, made solely for the convenience of the reader, is based on the noon buying rate in the city of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York as of September 30, 2013, which was RMB 6.1200 to $1.0. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on September 30, 2013, or at any other date. The percentages stated in this press release are calculated based on Renminbi.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words such as "may," "expect," "anticipate," "aim," "intend," "plan," "believe," "estimate," "potential," "continue," and other similar statements. Statements other than statements of historical facts in this announcement are forward-looking statements, including but not limited to, the Company's expectations regarding the expansion of its manufacturing capacities, its future business development, and its beliefs regarding its production output and production outlook. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. Further information regarding these and other risks is included in Form 20-F and other documents filed with the Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

About JA Solar Holdings Co., Ltd.

JA Solar Holdings Co., Ltd. is a leading manufacturer of high-performance solar power products that convert sunlight into electricity for residential, commercial, and utility-scale power generation. The Company is one of the world's largest producers of solar power products. Its standard and high-efficiency product offerings are among the most powerful and cost-effective in the industry. The Company distributes products under its own brand and also produces on behalf of its clients. The Company shipped 1.7 GW of solar power products in 2012. JA Solar is headquartered in Shanghai, China, and maintains production facilities in Shanghai, as well as Hebei, Jiangsu and Anhui provinces.

For more information, please visit www.jasolar.com.

CONTACT: In China
         
         Nick Beswick
         Brunswick Group
         Tel: +86-10-5960-8600
         E-mail:jasolar@brunswickgroup.com
         
         In the U.S.
         
         Cindy Zheng
         Brunswick Group
         Tel: +1-212-333-3810
         E-mail:jasolar@brunswickgroup.com