Trina Solar Announces Mixed Financial Results for the Fourth Quarter and Fiscal Year 2012

February 25, 2013 by Jeff Shepard

Fourth quarter 2012 financial and operating Results for Trina Solar Limited included: solar module shipments were approximately 415 MW for the fourth quarter of 2012, compared to approximately 380 MW during the third quarter of 2012, a sequential increase of 9.0%; net revenues were $302.7 million, an increase of 1.6% sequentially; gross profit was $5.6 million, an increase of 139.1% sequentially; and gross margin was 1.9%, compared to 0.8% in the third quarter.

In addition, the company reported: operating loss was $70.4 million, compared to an operating loss of $76.0 million in the third quarter of 2012; operating margin, including a provision for doubtful receivables of $14.5 million, was negative 23.3%, compared to negative 25.5% in the third quarter of 2012; net loss was $87.2 million, compared to a net loss of $57.5 million in the third quarter of 2012; and loss per fully diluted American Depositary Share ("ADS") were $1.23, compared to $0.81 in the third quarter of 2012.

Full year 2012 highlights included the following: solar module shipments were approximately 1.59 GW, compared to the Company's previous guidance of between 1.55 GW to 1.6 GW, an increase of 5.4% from 2011; total net revenues were $1.30 billion, a decrease of 36.7% from 2011; gross profit was $57.2 million, a decrease of 82.8% from 2011; ross margin was 4.4%, compared to 16.2% in 2011; operating loss was $264.9 million, compared to operating income of $31.0 million in 2011; and a net loss for the full year was $266.6 million, compared to $37.8 in 2011.

"While realizing sequential improvements in shipments in the fourth quarter, our bottom line continued to be adversely impacted by a supply-demand imbalance and aggressive pricing by some competitors," said Mr. Jifan Gao, Chairman and CEO of Trina Solar. "Amidst these commercial conditions, our focus on profitable sales, inventory management, and on-going expense reductions allowed us to achieve positive operating cash flow. During the fourth quarter we also made progress in the global development of our in-house system business, and expect to commence grid-scale opportunities in China and the Americas later this year."

"Looking ahead, we believe that the further decrease in module and total system costs will drive increased global demand for the PV industry in 2013, despite the decrease in favorable government policy in traditional European markets. Meanwhile, we are seeing a ramping up in PV adoption and planning in new markets within Africa, the Americas and the Middle East. We are also encouraged by recent announcements in Asia, most notably in China and Japan, that governments are strengthening their commitment to solar energy and raising the target for solar power contribution to the national grid capacity."

"As solar-generated power increasingly competes against traditional energy forms for large-scale power purchase agreements, we continue efforts to expand our project systems business as a percentage of our overall business, while continuing to deliver innovative products and services through increasing partnerships with the PV industry's leading global technology developers. Our efforts were recently recognized by Fast Company Magazine, which named Trina Solar in their list of The World's Top 10 Most Innovative Companies in China. We believe that because of these factors, Trina Solar will continue to solidify its position as a brand and partner of choice across multiple geographies and end user segments."