Suntech announces financial results, revenue declines 8% in 4Q 2012

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Greentech Lead Asia: Suntech Power Holdings (Suntech) preliminary financial results for the fourth quarter and full year ended December 31, 2012 indicates that the revenue in the fourth quarter of 2012 declined 8 percent sequentially to $358 million.

Suntech’s shipments of photovoltaic (PV) products for the fourth quarter of 2012 declined by approximately 4 percent from the third quarter of 2012.

Approximately 91 percent of revenues were generated from the sale of PV modules, and 9 percent of revenues were generated from the sale of PV systems, cells, silicon wafers and production equipment.

Gross margin in the fourth quarter of 2012 was approximately 0.4 percent.

For the full year 2012, preliminary results indicate Suntech shipped approximately 1.8GW of PV products, in line with prior guidance.

Revenues for the full year 2012 were approximately $1,625 million, a year-over-year decline of 48 percent.

Approximately 92 percent of revenues were generated from the sale of PV modules, and 8 percent of revenues were generated from the sale of PV systems, cells, silicon wafers and production equipment. Gross margin for the full year 2012 was approximately negative 1.4 percent.

Suntech Chinese subsidiary Wuxi Suntech filed for bankruptcy in March after it defaulted on a $541 million bond payment. Suntech failed to pay as it ran short of cash following heavy losses over the past year.

Suntech has entered into a forbearance agreement with holders of over 60 percent of the Notes under which the signing bondholders agree not to exercise their rights under the Notes and the related indenture until May 15, 2013, subject to certain market-standard early termination events.

“We are undertaking a number of restructuring initiatives to address Suntech’s balance sheet and improve the Company’s cost structure and operational efficiency,” said David King, Suntech’s CEO. “We are making progress and are evaluating solutions that will take into account the rights and interests of all of our stakeholders.”

Suntech will continue to manufacture and deliver high-quality solar products to its global customers, King added.

Wuxi Suntech, the Company’s Chinese subsidiary, which is in the process of restructuring, continues to work with the court-appointed administrator and its stakeholders to improve its financial position and outlook.

The administrator has scheduled a Wuxi Suntech creditors meeting in Wuxi on May 22, 2013, earlier than previously anticipated, to present and discuss potential solutions.

Suntech Power International (SPI), the Company’s principal operating subsidiary in Europe, is working closely with the court-appointed administrator and has proposed a new business plan to establish sustainable operations.

SPI has been granted a provisional moratorium for two months to restructure its debt.  SPI had applied for the provisional moratorium as a result of over-indebtedness, a requirement under local law and regulations.

The Company’s intention is that the new business plan will enable SPI to enter a definitive moratorium that would provide a platform to enter discussions with SPI’s creditors.

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