Einfach E-Mail-Adresse eintragen und auf "Abschicken" klicken - willkommen!
Jetion Holdings: Preliminary 2008 Results
Die untenstehende Meldung ist eine Original-Meldung des Unternehmens. Sie ist nicht von der ECOreporter.de-Redaktion bearbeitet. Die presserechtliche Verantwortlichkeit liegt bei dem meldenden Unternehmen.
Jetion Holdings Limited, a leading designer, manufacturer and supplier of high quality solar cells and modules, today announces its preliminary results for the twelve months ended 31 December 2008.
HIGHLIGHTS
• . Sales up 141% to US$250.9m (2007 : US$104.0m (restated*))
• . Gross profit up 168% to US$40.8m, (2007 : US$15.2m (restated*))
• . Gross margin up 11.6% to 16.3%, (2007 : 14.6% (restated*))
• . Pre Tax Profit up 328% to US$20.1m (2007 : US$4.7m (restated*))
• . Adjusted EBITDA (excl. foreign exchange losses) up 315% to US$34.5m (2007: US$8.3m (restated*))
• . Pro-forma earnings per share up 160% to US 24.0 cents (2007 : US 9.2 cents (restated*))
• . Cell manufacturing capacity doubled in the year to 100MW pa (2007: 50MW); module capacity increased to 60MW pa (2007: 40MW).
• . Total PV module shipments were 45.2MW, representing an increase of 451% from 8.2MW in 2007.
• . Jetion was named the Fastest-Growing Company in Deloitte Technology Fast 50 China 2008 and #2 in Deloitte Technology Fast 500 Asia Pacific 2008.
• 2007 reporting figures have been restated, please refer to below for the details of prior year adjustments.
Commenting on the results Chairman Gabriel Kow said:
“I am delighted to report another year of strong growth during 2008. Despite the turbulent market conditions that emerged in Q4 2008, the Company has established a strong foundation to deal with the challenges ahead. I continue to be optimistic about the Company in 2009 and strongly believe that we will continue to move forward in accomplishing our goals.”
For further Information, contact:
Jetion Holdings Limited
Gabriel Kow
+44 (0) 7810 568 788
CHAIRMAN’S STATEMENT
2008 has been a year of fast growth for Jetion Holdings Limited. In the second half of 2008, the solar cell production capacity of the Company doubled from 50MW p.a. to 100MW p.a. and the module capacity increased from 40MW p.a. to 60MW p.a. This expansion of our production capacity has enabled Jetion to capture a greater proportion of the value chain by increasing the proportion of solar modules in its product and revenue mix.
In 2008, the Company made significant improvements to its cost controls, conversion efficiency rates, brand building and customer relations. All these have enabled the Company to meet its performance targets for the year and to steadily improve its market profile and enhance its service to customers.
The integration of the production chain has transformed the Company into a manufacturer of both solar cells and modules. The Company is now equipped with wafer slicing capacity as well as solar cell and module production, allowing us to offer high quality module products to our customers.
The solar industry remains one of the world’s fastest growing industries. We continue to achieve substantial sales growth and increasing recognition from customers in Europe where solar applications are becoming sophisticated. We aim to expand our customer base in Europe and are well-positioned to enter new overseas markets, such as the US. It is highly encouraging to see many governments implementing plans to encourage solar applications such as the subsidy policy issued by the PRC government in March 2009 for PV applications market in China.
Since its listing on AIM in July 2007, the majority of the Company’s short term growth plans have been achieved. Despite unsettled market conditions, particularly in the last quarter of 2008. During the year, the Company recorded sales revenue of US$250.9 million and adjusted EBITDA (excluding foreign exchange losses) of US$34.5 million, representing increases of 141.3% and 315.6% respectively over 2007, a highly credible financial performance in the current economic conditions
The Company has been facing the challenges of falling prices, and slowing demand from Europe since Q4 2008. Nevertheless, the partial offset of falling input prices and the overall performance for the preceding three quarters has enabled us to meet our annual performance targets. The efforts of our staff have helped us operate soundly and safely through this difficult time with enthusiasm, confidence and relentless efforts.
As Chairman, I am delighted to witness the strong growth of the Company during 2008. Despite the turbulent market conditions that emerged from Q4 2008, the Company has established strong foundations to deal with the challenges ahead. I continue to be optimistic about the Company in 2009 and strongly believe that we will continue to move forward in accomplishing our goals.
I would like to take this opportunity to thank our directors, officers and staff for their passion in the solar business and their perseverance in achieving our objectives and solid results in 2008. At the same time, I would also like to thank all our investors for their continued support and trust in the Company.
Gabriel Kow
Chairman
24 April 2009
CHIEF EXECUTIVE’S REVIEW
2008 has been an extraordinary year for the team during which we achieved very satisfactory results despite turbulent market conditions. As a result of our production capacity expansion, our solar cell production capacity reached 100MW p.a. in mid-2008. The solar cell output for the year amounted to 65.3MW (2007: 35.2MW) and solar module output amounted to 43.3MW (2007: 8.2MW) with an average conversion efficiency of 17% (2007: 16.5%). Shipments of solar cells were 18.2MW (excluding processing income) and shipments of solar modules were 45.2MW. Sales revenue for the year reached US$250.9 million (2007: restated* US$104.0 million) and gross profit was US$40.8 million (2007: restated* US$15.2 million). Both the sales revenue and profitability of the Company have increased significantly when compared to 2007.
Strategy
According to an independent research report issued by Solarbuzz for 2009, the solar industry will continue to achieve very strong growth with solar energy applications gaining further recognition from numerous countries throughout the year. Capitalising on the opportunities arising from the fast growing solar industry, we aim to become one of the leading designers and manufacturers of solar system solutions in the world. We will continue to increase our product quality, enhance our vertical integration within the value chain and establish a comprehensive and effective global sales network. In addition, we will continue to provide high quality services to our customers whilst maintaining technology development to further develop our professional brand.
Operations
In 2008, the Company recorded significant improvements in the majority of its performance targets. In particular, we have made substantial progress as regards to our product mix, technology standards, product quality and inventory control.
Sales of solar modules increased from 22.6% of total sales in 2007 to 76.6% in 2008, which contributed to the overall increase in profit margins. The Company has transformed itself into a major manufacturer of solar modules having had market sales of predominately solar cells prior to 2008. As we have developed our sales channels, the Company further expanded its sales coverage from Germany and Spain to other European countries. In 2008, the revenue breakdown was between China (c. 24%), Germany (c. 56%), Spain (c. 16%), Italy (c. 2%) and other emerging markets (c. 2%). Through our expanding sales channels, we have widened our customer base and have established a sound relationship with a number of respected solar buyers, such as Schüco, Mage Solar and Bayerische Solar.
In 2008, we substantially improved the conversion efficiency of our solar cells. Our average conversion efficiency rate reached 17% compared to the maximum conversion efficiency rate under mass production of 18%. This improvement is attributable to our continued emphasis on and efforts into R&D, process upgrades and technical excellence. Through consistent improvement, our technology team not only generated a significant increase in the conversion efficiency rate of monocrystalline solar cells, but it also fully mastered the technology of high efficiency polycrystalline solar cells and UMG solar cells. These technological advances have enabled us to offer a more diversified product mix to our customers and provided strong post-sales support and services for our customers.
After obtaining the European TUV accreditation in October 2007, we applied for the key (Underwriters Laboratories) UL product certification for the US and Canadian markets. The company was granted this accreditation in March 2009, providing validation that the Company’s products are in compliance with the same strict international requirements on product quality and safety as our counterparts in Europe and the US and will provide the Company with significant leverage for entering into new markets such as the US and Canada. Concurrently, ongoing improvements in our product quality and efficiency also bore fruit with a yield of over 98% and a utilization rate of over 90%. We believe that the quality of our product compares favorably with our most advanced competitors worldwide.
Inventory control was also one of the key development areas in 2008. As a result of stringent inventory controls, the possible downside risk of falling raw material prices and product selling prices since Q4 2008 was controlled and managed effectively. The inventory of raw materials and finished products were kept at a minimum which avoided the uncertainties involving market price volatility. Despite the losses incurred as a result of the foreign exchange fluctuations in 2008, such losses were minimized due to the adjustment of product mix and customer base and appropriate foreign exchange hedging by the Company. As a result of our efforts, the Company maintained a sound net cash position of US$3.6 million (2007: US$9.4 million) at the year end. We fully understand the importance of maintaining sufficient cash under current unstable economic conditions.
The Company was granted the Fastest-Growing Company in Deloitte Technology Fast 50 China and the second prize in Deloitte Technology Fast 500 Asia Pacific 2008 in November and December 2008, respectively. These awards provide significant motivation and encouragement to the Company. We truly believe that our efforts will lead to an increase in shareholder value as we strive towards achieving our long-term goals.
Outlook
The falling raw material prices and product prices since Q4 2008 are a direct result of the global economic crisis. We believe that the decrease in solar product prices is favourable to gaining governments’ confidence and support for solar power generation from which our end users will benefit. We are encouraged to see an increasing number of families across the globe using clean and more affordable solar energy. We aim to maintain our profitability amid price and currency fluctuations based on our market judgment and through establishing sound relationships with our suppliers and customers.
Looking ahead, the global economy is widely expected to shrink further due to the current crisis and there are still many uncertainties ahead of us. However, we remain confident that the solar industry will take a lead in recovering from the economic downturn. Since March 2009, the operating conditions of the Company have substantially returned to the same level as the corresponding period last year and we have had steady orders from our customers. Coupled with the increasing demand from the emerging markets, we will be confident that we are able to accomplish our targets in 2009.
Lijin Gai
Chief Executive Officer
24 April 2009
FINANCIAL REVIEW
Overview
Total group sales during the year, with the benefit of an additional 50MW of capacity, increased to US$250.9 million (2007: restated* US$104.0 million). This increase in turnover reflects an increase in cell production to 65.3MW (2007: 35.2MW) and an increase in conversion of cells to modules of 43.3MW (2007: 8.2MW) following the addition of two production lines in mid-2008.
Gross profit increased to US$40.8 million (2007: restated* US$15.2 million) and the gross margin was 16.3% (2007: restated* 14.6%). Gross margin compared with the prior year reflects improvements in efficiency and yield and the increase in the proportion of solar cells converted into solar modules that were sold at higher margins. However, the impact of the global distressed economy was felt during the fourth quarter of 2008 when gross margin for the last three months fell significantly to 9.6%. This fall was due to market price reductions, which, because of the time lags, was not counteracted by a fall in input prices until later.
Operating profit before share-based expense for the year rose to US$31.5 million (2007: restated* US$5.6 million) after taking into account provisions for inventory of US$1.2 million (2007: Nil) and provisions for prepayment to suppliers of US$1.8 million (2007: Nil). Adjusted EBITDA in 2008 (excluding foreign exchange losses) amounted to US$34.5 million (2007: restated* US$8.3 million).
Net finance costs were US$9.7 million (2007: US$0.1 million). This reflects the impact of substantial amounts of cash and cash equivalents denominated in Euros being pledged for bank debts and notes denominated in Renminbi for hedging purposes; the adverse effect of foreign exchange losses of US$7.8 million (2007: restated* US$0.06 million) due to exposure of sales in Euros and costs in Renminbi and U.S. dollars; and net fair value losses of leveraged foreign exchange contracts.
Income tax for 2008 was US$3.7 million (2007: Nil) with an effective tax rate for 2008 of 12.5% (2007: Nil). 2008 was the first year of tax being chargeable at the preferential rate of 12.5% (being a 50% reduction of the statutory tax rate of 25%) upon expiry of the tax-free holiday.
The profit attributable to the equity holders of the Company amounted to US$16.4 million (2007: restated* US$4.7 million). Basic and diluted earnings per share before the adjustment for share-based expenses amounted to US24.0 cents (2007: restated* US15.1 cents). Pro forma earnings per share, which best shows the trend in earnings per share, amounted to US24.0 cents (2007: restated* US9.2 cents).
Prior year adjustments
Following further consultation with its advisors, the Company has decided to change the accounting treatment of the reorganization which took place before the listing of its shares on AIM on 6 July 2007, from a merger accounting basis to an acquisition accounting basis. As a result of this change, there has been an upward revaluation of net assets, which has been dealt with as a prior year adjustment. Consequently, the depreciation and amortization charge has increased by around US$2.2 million for the current period. The comparative figures for 2007 have been restated to reflect this change.
Balance sheet & cash flow
At the year end, total equity was US$107.5 million (2007: restated* US$83.4 million). The Group had net cash of US$3.6 million at the year end (2007: US$9.4 million). The decrease in net cash in the year was due to the costs of expanding the production facilities.
Prepayments to suppliers for silicon raw materials amounted to US$34.3 million at 31 December 2008 (2007: restated* US$39.5 million). The return on invested capital calculated as profit after tax before finance charges, divided by the average of opening and closing shareholders equity and net debt was 26.3% (2007 restated* 8.0%).
The net cash inflow in the year from operating activities after interest and taxation payments was US$15.4 million (2007: restated* outflow of US$30.4 million). Net cash used in investing activities in 2008 was US$19.2 million (2007: restated* US$11.6 million) being principally the addition of 50MW of solar cell production capacity and fixed assets in construction relating to the planned production capacity.
Going concern
In accordance with the recommendations of the Combined Code, the Directors have considered the budgets, forecasts, cash flows and the outlook from the operating companies and consider that the Company and the Group have adequate financial resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing these financial statements.
Stephen Hon Cheung So
Chief Financial Officer
Jetion Holdings Limited, a leading designer, manufacturer and supplier of high quality solar cells and modules, today announces its preliminary results for the twelve months ended 31 December 2008.
HIGHLIGHTS
• . Sales up 141% to US$250.9m (2007 : US$104.0m (restated*))
• . Gross profit up 168% to US$40.8m, (2007 : US$15.2m (restated*))
• . Gross margin up 11.6% to 16.3%, (2007 : 14.6% (restated*))
• . Pre Tax Profit up 328% to US$20.1m (2007 : US$4.7m (restated*))
• . Adjusted EBITDA (excl. foreign exchange losses) up 315% to US$34.5m (2007: US$8.3m (restated*))
• . Pro-forma earnings per share up 160% to US 24.0 cents (2007 : US 9.2 cents (restated*))
• . Cell manufacturing capacity doubled in the year to 100MW pa (2007: 50MW); module capacity increased to 60MW pa (2007: 40MW).
• . Total PV module shipments were 45.2MW, representing an increase of 451% from 8.2MW in 2007.
• . Jetion was named the Fastest-Growing Company in Deloitte Technology Fast 50 China 2008 and #2 in Deloitte Technology Fast 500 Asia Pacific 2008.
• 2007 reporting figures have been restated, please refer to below for the details of prior year adjustments.
Commenting on the results Chairman Gabriel Kow said:
“I am delighted to report another year of strong growth during 2008. Despite the turbulent market conditions that emerged in Q4 2008, the Company has established a strong foundation to deal with the challenges ahead. I continue to be optimistic about the Company in 2009 and strongly believe that we will continue to move forward in accomplishing our goals.”
For further Information, contact:
Jetion Holdings Limited
Gabriel Kow
+44 (0) 7810 568 788
CHAIRMAN’S STATEMENT
2008 has been a year of fast growth for Jetion Holdings Limited. In the second half of 2008, the solar cell production capacity of the Company doubled from 50MW p.a. to 100MW p.a. and the module capacity increased from 40MW p.a. to 60MW p.a. This expansion of our production capacity has enabled Jetion to capture a greater proportion of the value chain by increasing the proportion of solar modules in its product and revenue mix.
In 2008, the Company made significant improvements to its cost controls, conversion efficiency rates, brand building and customer relations. All these have enabled the Company to meet its performance targets for the year and to steadily improve its market profile and enhance its service to customers.
The integration of the production chain has transformed the Company into a manufacturer of both solar cells and modules. The Company is now equipped with wafer slicing capacity as well as solar cell and module production, allowing us to offer high quality module products to our customers.
The solar industry remains one of the world’s fastest growing industries. We continue to achieve substantial sales growth and increasing recognition from customers in Europe where solar applications are becoming sophisticated. We aim to expand our customer base in Europe and are well-positioned to enter new overseas markets, such as the US. It is highly encouraging to see many governments implementing plans to encourage solar applications such as the subsidy policy issued by the PRC government in March 2009 for PV applications market in China.
Since its listing on AIM in July 2007, the majority of the Company’s short term growth plans have been achieved. Despite unsettled market conditions, particularly in the last quarter of 2008. During the year, the Company recorded sales revenue of US$250.9 million and adjusted EBITDA (excluding foreign exchange losses) of US$34.5 million, representing increases of 141.3% and 315.6% respectively over 2007, a highly credible financial performance in the current economic conditions
The Company has been facing the challenges of falling prices, and slowing demand from Europe since Q4 2008. Nevertheless, the partial offset of falling input prices and the overall performance for the preceding three quarters has enabled us to meet our annual performance targets. The efforts of our staff have helped us operate soundly and safely through this difficult time with enthusiasm, confidence and relentless efforts.
As Chairman, I am delighted to witness the strong growth of the Company during 2008. Despite the turbulent market conditions that emerged from Q4 2008, the Company has established strong foundations to deal with the challenges ahead. I continue to be optimistic about the Company in 2009 and strongly believe that we will continue to move forward in accomplishing our goals.
I would like to take this opportunity to thank our directors, officers and staff for their passion in the solar business and their perseverance in achieving our objectives and solid results in 2008. At the same time, I would also like to thank all our investors for their continued support and trust in the Company.
Gabriel Kow
Chairman
24 April 2009
CHIEF EXECUTIVE’S REVIEW
2008 has been an extraordinary year for the team during which we achieved very satisfactory results despite turbulent market conditions. As a result of our production capacity expansion, our solar cell production capacity reached 100MW p.a. in mid-2008. The solar cell output for the year amounted to 65.3MW (2007: 35.2MW) and solar module output amounted to 43.3MW (2007: 8.2MW) with an average conversion efficiency of 17% (2007: 16.5%). Shipments of solar cells were 18.2MW (excluding processing income) and shipments of solar modules were 45.2MW. Sales revenue for the year reached US$250.9 million (2007: restated* US$104.0 million) and gross profit was US$40.8 million (2007: restated* US$15.2 million). Both the sales revenue and profitability of the Company have increased significantly when compared to 2007.
Strategy
According to an independent research report issued by Solarbuzz for 2009, the solar industry will continue to achieve very strong growth with solar energy applications gaining further recognition from numerous countries throughout the year. Capitalising on the opportunities arising from the fast growing solar industry, we aim to become one of the leading designers and manufacturers of solar system solutions in the world. We will continue to increase our product quality, enhance our vertical integration within the value chain and establish a comprehensive and effective global sales network. In addition, we will continue to provide high quality services to our customers whilst maintaining technology development to further develop our professional brand.
Operations
In 2008, the Company recorded significant improvements in the majority of its performance targets. In particular, we have made substantial progress as regards to our product mix, technology standards, product quality and inventory control.
Sales of solar modules increased from 22.6% of total sales in 2007 to 76.6% in 2008, which contributed to the overall increase in profit margins. The Company has transformed itself into a major manufacturer of solar modules having had market sales of predominately solar cells prior to 2008. As we have developed our sales channels, the Company further expanded its sales coverage from Germany and Spain to other European countries. In 2008, the revenue breakdown was between China (c. 24%), Germany (c. 56%), Spain (c. 16%), Italy (c. 2%) and other emerging markets (c. 2%). Through our expanding sales channels, we have widened our customer base and have established a sound relationship with a number of respected solar buyers, such as Schüco, Mage Solar and Bayerische Solar.
In 2008, we substantially improved the conversion efficiency of our solar cells. Our average conversion efficiency rate reached 17% compared to the maximum conversion efficiency rate under mass production of 18%. This improvement is attributable to our continued emphasis on and efforts into R&D, process upgrades and technical excellence. Through consistent improvement, our technology team not only generated a significant increase in the conversion efficiency rate of monocrystalline solar cells, but it also fully mastered the technology of high efficiency polycrystalline solar cells and UMG solar cells. These technological advances have enabled us to offer a more diversified product mix to our customers and provided strong post-sales support and services for our customers.
After obtaining the European TUV accreditation in October 2007, we applied for the key (Underwriters Laboratories) UL product certification for the US and Canadian markets. The company was granted this accreditation in March 2009, providing validation that the Company’s products are in compliance with the same strict international requirements on product quality and safety as our counterparts in Europe and the US and will provide the Company with significant leverage for entering into new markets such as the US and Canada. Concurrently, ongoing improvements in our product quality and efficiency also bore fruit with a yield of over 98% and a utilization rate of over 90%. We believe that the quality of our product compares favorably with our most advanced competitors worldwide.
Inventory control was also one of the key development areas in 2008. As a result of stringent inventory controls, the possible downside risk of falling raw material prices and product selling prices since Q4 2008 was controlled and managed effectively. The inventory of raw materials and finished products were kept at a minimum which avoided the uncertainties involving market price volatility. Despite the losses incurred as a result of the foreign exchange fluctuations in 2008, such losses were minimized due to the adjustment of product mix and customer base and appropriate foreign exchange hedging by the Company. As a result of our efforts, the Company maintained a sound net cash position of US$3.6 million (2007: US$9.4 million) at the year end. We fully understand the importance of maintaining sufficient cash under current unstable economic conditions.
The Company was granted the Fastest-Growing Company in Deloitte Technology Fast 50 China and the second prize in Deloitte Technology Fast 500 Asia Pacific 2008 in November and December 2008, respectively. These awards provide significant motivation and encouragement to the Company. We truly believe that our efforts will lead to an increase in shareholder value as we strive towards achieving our long-term goals.
Outlook
The falling raw material prices and product prices since Q4 2008 are a direct result of the global economic crisis. We believe that the decrease in solar product prices is favourable to gaining governments’ confidence and support for solar power generation from which our end users will benefit. We are encouraged to see an increasing number of families across the globe using clean and more affordable solar energy. We aim to maintain our profitability amid price and currency fluctuations based on our market judgment and through establishing sound relationships with our suppliers and customers.
Looking ahead, the global economy is widely expected to shrink further due to the current crisis and there are still many uncertainties ahead of us. However, we remain confident that the solar industry will take a lead in recovering from the economic downturn. Since March 2009, the operating conditions of the Company have substantially returned to the same level as the corresponding period last year and we have had steady orders from our customers. Coupled with the increasing demand from the emerging markets, we will be confident that we are able to accomplish our targets in 2009.
Lijin Gai
Chief Executive Officer
24 April 2009
FINANCIAL REVIEW
Overview
Total group sales during the year, with the benefit of an additional 50MW of capacity, increased to US$250.9 million (2007: restated* US$104.0 million). This increase in turnover reflects an increase in cell production to 65.3MW (2007: 35.2MW) and an increase in conversion of cells to modules of 43.3MW (2007: 8.2MW) following the addition of two production lines in mid-2008.
Gross profit increased to US$40.8 million (2007: restated* US$15.2 million) and the gross margin was 16.3% (2007: restated* 14.6%). Gross margin compared with the prior year reflects improvements in efficiency and yield and the increase in the proportion of solar cells converted into solar modules that were sold at higher margins. However, the impact of the global distressed economy was felt during the fourth quarter of 2008 when gross margin for the last three months fell significantly to 9.6%. This fall was due to market price reductions, which, because of the time lags, was not counteracted by a fall in input prices until later.
Operating profit before share-based expense for the year rose to US$31.5 million (2007: restated* US$5.6 million) after taking into account provisions for inventory of US$1.2 million (2007: Nil) and provisions for prepayment to suppliers of US$1.8 million (2007: Nil). Adjusted EBITDA in 2008 (excluding foreign exchange losses) amounted to US$34.5 million (2007: restated* US$8.3 million).
Net finance costs were US$9.7 million (2007: US$0.1 million). This reflects the impact of substantial amounts of cash and cash equivalents denominated in Euros being pledged for bank debts and notes denominated in Renminbi for hedging purposes; the adverse effect of foreign exchange losses of US$7.8 million (2007: restated* US$0.06 million) due to exposure of sales in Euros and costs in Renminbi and U.S. dollars; and net fair value losses of leveraged foreign exchange contracts.
Income tax for 2008 was US$3.7 million (2007: Nil) with an effective tax rate for 2008 of 12.5% (2007: Nil). 2008 was the first year of tax being chargeable at the preferential rate of 12.5% (being a 50% reduction of the statutory tax rate of 25%) upon expiry of the tax-free holiday.
The profit attributable to the equity holders of the Company amounted to US$16.4 million (2007: restated* US$4.7 million). Basic and diluted earnings per share before the adjustment for share-based expenses amounted to US24.0 cents (2007: restated* US15.1 cents). Pro forma earnings per share, which best shows the trend in earnings per share, amounted to US24.0 cents (2007: restated* US9.2 cents).
Prior year adjustments
Following further consultation with its advisors, the Company has decided to change the accounting treatment of the reorganization which took place before the listing of its shares on AIM on 6 July 2007, from a merger accounting basis to an acquisition accounting basis. As a result of this change, there has been an upward revaluation of net assets, which has been dealt with as a prior year adjustment. Consequently, the depreciation and amortization charge has increased by around US$2.2 million for the current period. The comparative figures for 2007 have been restated to reflect this change.
Balance sheet & cash flow
At the year end, total equity was US$107.5 million (2007: restated* US$83.4 million). The Group had net cash of US$3.6 million at the year end (2007: US$9.4 million). The decrease in net cash in the year was due to the costs of expanding the production facilities.
Prepayments to suppliers for silicon raw materials amounted to US$34.3 million at 31 December 2008 (2007: restated* US$39.5 million). The return on invested capital calculated as profit after tax before finance charges, divided by the average of opening and closing shareholders equity and net debt was 26.3% (2007 restated* 8.0%).
The net cash inflow in the year from operating activities after interest and taxation payments was US$15.4 million (2007: restated* outflow of US$30.4 million). Net cash used in investing activities in 2008 was US$19.2 million (2007: restated* US$11.6 million) being principally the addition of 50MW of solar cell production capacity and fixed assets in construction relating to the planned production capacity.
Going concern
In accordance with the recommendations of the Combined Code, the Directors have considered the budgets, forecasts, cash flows and the outlook from the operating companies and consider that the Company and the Group have adequate financial resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing these financial statements.
Stephen Hon Cheung So
Chief Financial Officer