LDK = LDK Solar. Makes wafers, modules
4Q09 earnings call transcript: seekingalpha.com (Oddly, they presented only 4Q09, not full year 2009 results.)
company website: investor.ldksolar.com
stock: $77 to $4 to $7, 2007 hi to 2009 lo to now
Xiaofeng Peng (nicknamed Light), born 1975, founded LDK Solar in July 2005 and is its chairman and chief executive officer.
2009 results:
end-2009 capacity:
1800 MW wafers
550 MW modules
0 cells
cash: 454M$ end-2009 (cash, cash eq., and pledged bank deposits)
debt: 1788M$ end-2009 (980M$ ST + 400M$ convertibles + 408M$ LT). Not including 251M$ in "other liabilities", up from 65M$ last quarter.
revenue by geography 4Q09:
37% China
39% Asia-Pacific, excluding China
20% Europe (much less than TSL,STP,YGE)
4% N. America
Gross margin 4Q09 was 9.9%. Net loss for the fourth quarter was $7.3 million, and loss per diluted ADS was $0.07
Our polysilicon inventory at the end of fourth quarter was approximately 2,931 metric tons at an average cost of approximately $70 per kilogram, reflecting procurement of materials during the fourth quarter under previous purchase commitment.
The company sold 15% of their poly plant to an investment group, close to the province of Jiangxi, for a cost of $219 million (November 19, 2009)
2010 Guidance:
Revenue $1.4B, gross margin 15-20%
For the first quarter of fiscal 2010, LDK Solar estimates its revenue to be in the range of $310 million to $330 million, with wafer shipments between 370 MW to 400 MW, and module shipments between 25 MW to 30 MW.
end-2010 capacity:
2200 MW wafer
1500 MW module
60 MW solar cell in-house production
We expect capital expenditure to be in the range of $200 million to $300 million in 2010.
As our polysilicon production continued to ramp, we are seeing the cost of production decline and we expect to reach approximately $75 by the end of 2010.
Raised $111M by selling more stock:
At September 30, 2009, we had a working capital deficit (i.e., total consolidated current liabilities exceeded total consolidated current assets) of $1,151.7 million and an accumulated deficit of $8.5 million. During the nine months ended September 30, 2009, we incurred a net loss of $209.9 million and used $95.2 million of cash in operations. As of September 30, 2009, we had cash and cash equivalents of $67.7 million, most of which are held by subsidiaries in China. Most of our short-term bank borrowings and current installments of our long-term debt totaling $1,103.8 million are the obligations of these subsidiaries. These factors initially raised substantial doubt as to our ability to continue as a going concern. We are in need of additional funding to sustain our business as a going concern, and we have formulated a plan to address our liquidity problem. seekingalpha.com
My comment: It's an odd business. I don't understand why they make modules but not cells. I don't understand why they are building polysilicon capacity, in the face of huge industry oversupply and collapsing prices. I don't understand why, having built that capacity, they are selling some it.
Margins are horrible, debt is horrible, way too much of the debt is short-term. They didn't present full 2009 numbers, they presented 4Q09 numbers later than the other big companies. They didn't give earnings guidance, their margin guidance was a wide range. They evaded a lot of questions about 2010, giving me the ugly feeling they are hiding something. |
