Suntech Reports Second Quarter 2009 Financial Results
Suntech Power Holdings Co., Ltd. announced financial results for its second fiscal quarter ended June 30, 2009. Total net revenues for the second quarter of 2009 were $321.0 million, an increase of 1.7% from $315.7 million in the first quarter of 2009. Total net revenues from the investee companies of GSF were $15.3 million in the second quarter of 2009 compared with $100.5 million in the first quarter. Sales to the investee companies of GSF were conducted under terms comparable to those with unrelated parties, and the revenue and profit related to the sales activities during the second quarter of 2009 were fully recognized during the same period.
For the second quarter of 2009, gross profit was $59.7 million and gross margin was 18.6% compared to gross profit of $56.3 million and gross margin of 17.8% in the first quarter of 2009. The increase in gross profit was primarily due to Suntech’s silicon wafer cost and total cost structure falling faster than sales price in the second quarter of 2009.
Operating expenses for the second quarter of 2009 were $38.6 million compared to $35.1 million in the first quarter of 2009. The increase was primarily due to additional hires to improve sales and marketing efforts and a bad debt provision. Income from operations was $21.1 million for the second quarter of 2009, which was flat with the first quarter of 2009.
"During the second quarter, we continued to demonstrate Suntech’s ability to adapt to fluid market conditions and improve competitiveness," said Dr. Zhengrong Shi, Suntech’s Chairman and CEO. "A seasonal pick up in demand combined with a gradual thawing of global financial markets and improving project returns led to sequential shipment growth in most of our major markets. In addition, despite pricing pressure, our continued reduction of silicon costs enabled us to improve gross margin in the second quarter."
"In addition to our market expansion initiatives, we are making significant progress in technology development. Suntech’s multi-crystalline Pluto module was recently accepted by the scientific journal Progress in Photovoltaics as the world’s highest conversion efficiency multi-crystalline module with 15.6% conversion efficiency. In addition, our new state-of-the- art PV module testing facility, which is the largest in China, will help to enhance our efforts to deliver the most reliable and premium quality solar products in the market."