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New York-listed solar company Suntech Power enjoyed a stronger than expected end to 2011, despite some cautious early guidance.
The company exceeded shipment guidance for the fourth quarter of 2011, according to its preliminary financial results for the fourth quarter and full year ended 31 December 2011.
Suntech previously expected shipments to decline by approximately 20 per cent from the third quarter of 2011, but said it anticipates shipments to decline by approximately ten per cent from the third quarter of 2011. Revenues in the fourth quarter of 2011 are expected to be in the range of $610m to $630m. Gross margin is expected to be in the middle of the previously guided range of nine to 11 per cent, the company said.
It also said it expects shipments for the full year 2011 to be approximately 2.09GW, above previous guidance of 2GW. Revenues for the full year 2011 are expected to be in the range of $3.13bn to $3.15bn.
The company cited 'stringent working capital management', as the reason behind its reduced accounts receivable and inventory by a total of approximately $450m. This was partially offset by an approximate $85m decrease in accounts payable.
However, this result exceeds Suntech's stated goal to reduce accounts receivable and inventory by a total of $200m in the fourth quarter of 2012. Net debt declined by approximately $200m in the fourth quarter of 2011. Cash and restricted cash increased from $567.7m as of 30 September 2011 to over $700m as of 31 December 2011.
Dr. Zhengrong Shi, Suntech's chairman and CEO, said, 'Our sales and operations teams both performed well in the fourth quarter, enabling us to achieve key goals and improvements across our business. We exceeded shipment guidance and improved our cash position through ongoing management of accounts receivable and inventory. We also completed the impairment assessment for the third quarter of 2011. The charges that we incurred were all non-cash and will not impact our operations moving forward. We will continue to implement the initiatives necessary to maintain our position as the leading supplier of solar panels.'
