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JETION HOLDINGS (LON:JHL) – good results, shame about the communication concerns!
Posted 24/04/09
The AIM quoted designer, manufacturer and supplier of high quality solar cells and modules announced a fantastic set of results for the twelve months ended 31st December 2008.
Sales were up 141% to US$250.9m, gross profit up 168% to US$40.8m, gross margin up 11.6% to 16.3%, pre -tax profit up 328% to US$20.1m.
Pro-forma earnings per share were up 160% to US 24.0 cents.
At the operating level the business appears to continue to perform superbly.
Cell manufacturing capacity doubled in the year to 100MW and module capacity increasing to 60MW pa.
Revenue breakdown was
China 24%
Germany 56%
Spain 16%)
Italy 2%
and other emerging markets 2%.
They have established relationships with a number of respected solar buyers, such as Schüco, Mage Solar and Bayerische Solar.
The gong received as the Fastest-Growing Company in Deloitte Technology Fast 50 China 2008 and #2 in Deloitte Technology Fast 500 Asia Pacific 2008 is somewhat of a worry – we don’t like awards like this!
The results statement refers to research issued by Solarbuzz stating that 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. Jetion aims to become one of the leading designers and manufacturers of solar system solutions in the world and move up the value chain to establish a comprehensive and effective global sales network.
These are big ambitions for a small company with limited resources who would have difficulty raising new funds in the current climate. Furthermore, in a tighter market with falling product prices will they be able to maintain margins and effectively compete with the bigger boys?
The Outlook appears more positive than many had anticipated with the company reporting that since March 2009, the operating conditions of the Company have substantially returned to the same level as the corresponding period last year.
The increase in 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, gross margins for the last three months of the year fell significantly to 9.6% and one has to question what pressure these will be under in 2009.
The unexpected provisions for inventory of US$1.2m and for prepayment to suppliers of US$1.8m was not at all welcome!
The foreign exchange losses of US$7.8m due to exposure of sales in Euros and costs in Renminbi and U.S. dollars and net fair value losses of leveraged foreign exchange also came as a surprise
The unexpected provisions referred to above has drawn attention to the risks surrounding the prepayments to suppliers for silicon raw materials. At 31st December 2008 this amounted to a whopping US$34.3m (2007: restated US$39.5 million).
Operating profit of US$30m resulted in an operating cash inflow of US$15.4m – reflecting those pre-payments to suppliers.
Net assets were £73.6m which compares with the current market capitalisation of £48m and at the year end the group had net cash of US$3.6m. The group will require the cash in order to complete its planned cell capacity expansion, although the larger expansion plans have been put on hold.
It all looks encouraging much as it has all year but that recent trading update, the limited news flow and general market concerns has probably detracted many – so a good reason to remain interested?
This entry was posted 2 years, 9 months ago and was filed under Jetion.
