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June 10, 2015YGE Q1 2015 Results
Yingli Green Energy announced its Q1 2015 results lately. Its net revenues amounted to ~$469 million, which beat analyst estimate. Its module shipment at 754 MW also exceeded guidance. Its gross margin however declined quarterly to 14.1%. Shipments to Japan and other emerging markets increased and guidance for full year module shipment declined to 3.6 GW from 3.6-3.9 GW previously.
The company has plans to restructure its debt through alternative financing solutions. This will reduce its debt obligations and also improve its Balance Sheet. The company’s annual report for 2014 raised concerns about it continuing as a going concern. While others like Trina Solar, Canadian Solar and Jinko Solar have started posting profits, Yingli continues posting losses. Yingli was amongst the largest solar panel manufacturers in the world and it ranked second in terms of shipment right after Trina in 2014. Yingli successfully reduced costs, expanded its global footprint and also its project business in the last year. However its increasing debt is the main cause of concern, with the amount increasing to more than $2 billion.
What can YGE to do survive the downturn
As a recourse, the company is now looking at alternative financing options to reduce its debt. Also it is hoping to sell projects from its 1.6 GW pipeline, to help improve its cash position. As of now it has plans to sell 400-600 MW of these projects to the third parties in the current year.
“We are considering various strategies in such downstream businesses including selling self-developed solar projects to third parties upon completion, retaining and operating self-developed solar projects, forming joint ventures with third parties to develop and operate solar projects, and providing engineering, procurement and construction, or EPC services, to third parties.”
Yingli Green 2014 Annual report.
The company was successful in repaying the principal and interest on medium-term notes of RMB1.2 billion due in May 2015. There is another RMB1 billion due this October which according to the CEO, the company is confident to repay on time. Yingli Green Energy is one of the largest module supplier in China, if the company liquidates its assets it may impact the global supply chain. China itself has ambitious solar targets aiming 17.5 GW installation this year. If Yingli goes down it would impact the supply chain, thus affecting prices.