ZHONGSHAN, China, Aug. 28, 2012 /PRNewswire-Asia/ -- China Ming Yang Wind Power Group Limited ("Ming Yang" or the "Company") (NYSE: MY), a leading wind turbine manufacturer in China, today announced its unaudited financial results for the second quarter ended June 30, 2012.
Second Quarter 2012 Financial Highlights:
Mr. Zhang commented, "Our financial performance in the second quarter improved over the previous quarter, with gross margin improving by approximately 4.5% and operating margin turning from loss of RMB77.6 million into a profit of RMB6.4 million (US$1.0 million). As China's wind power industry continues to consolidate, Ming Yang is continuing to enhance its products and services in order to provide its customers with the best solutions in wind energy and strengthen its position in the market. We aim to deliver our products and services with higher power generation, higher efficiency and better reliability at lower cost of energy."
"Furthermore, we plan to continue executing our key strategic initiatives including broadening off-shore wind applications, pursuing overseas markets, utilizing innovative business models such as finance leasing, developing high technologies such as new material applications, and other research and development initiatives. We believe such initiatives will help us offer superior products and services to our customers."
Mr. Zhang concluded, "As the wind power industry in China continues to face challenges, we are investing for now and for the future. We believe that our advanced product and service offerings will continue help Ming Yang capitalize on market opportunities both in China and overseas markets and enhance its competitiveness during this market downturn."
Second Quarter 2012 Unaudited Financial Results
Revenue in the second quarter of 2012 was RMB798.0 million (US$125.6 million), representing a decrease of 43.2% from RMB1,405.5 million in the corresponding period in 2011. WTGs for which revenue was recognized amounted to an equivalent wind power project output of 198MW, or 99 units of 1.5MW WTGs and 17 units of 2.5-3.0MW SCD WTGs, compared to 367.5MW, or 245 units of 1.5MW WTGs, for the corresponding period in 2011. The decrease in revenue in the second quarter was primarily due to a decrease in average selling price ("ASP") and overall decreased market demand for WTGs in China.
During the second quarter, the Company installed 66 units of WTGs which are commissioned and generating electricity through its EPC program. Funding has been committed by local banks to the project developers, but is subject to final approval. As a result, the Company did not recognize expected revenue of RMB319.0 million for these WTGs during the quarter.
Gross Profit and Gross Margin
Gross profit in the second quarter of 2012 was RMB115.9 million (US$18.2 million), representing a decrease of 56.6% from RMB267.2 million for the corresponding period in 2011. Gross margin in the second quarter of 2012 was 14.5%, compared to 19.0% for the corresponding period in 2011. The decline was a result of lower ASP and higher average production cost. Compared with the first quarter of 2012, the gross margin, however, improved 4.5%, primarily due to the increase in ASP for WTGs recognized in the second quarter of 2012.
Selling and Distribution Expenses
Selling and distribution expenses were RMB24.5 million (US$3.9 million) for the second quarter of 2012, compared to RMB56.0 million for the corresponding period in 2011, representing a decrease of 56.2%, primarily due to a decrease in transportation expenses as a result of delivery of fewer number of WTGs during the period.
Administrative expenses were RMB77.1 million (US$12.1 million) for the second quarter of 2012, compared to RMB58.4 million for the corresponding period in 2011, representing an increase of 32.0%, primarily due to a provision of trade receivables of RMB22.4 million.
Research and Development Expenses
Research and development expenses were RMB22.7 million (US$3.6 million) for the second quarter of 2012, compared to RMB27.0 million for the corresponding period in 2011, representing a decrease of 15.8%. This decrease was primarily due to the cost of materials used in a benchmark test relating to our 2.5-3.0MW SCD WTG research and development incurred in the second quarter of 2011.
Net Finance Expense
Net finance expense was RMB17.6 million (US$2.8 million) for the second quarter of 2012, compared to a net finance expense of RMB25.0 million in the corresponding period of 2011.
Profit/Loss Before Income Tax Expense
Loss before income tax expense was RMB19.8 million (US$3.1 million) for the second quarter of 2012, compared to a profit before income tax expense of RMB107.8 million in the corresponding period of 2011.
Income Tax Expense
Income tax expense was RMB11.2 million (US$1.8 million) for the second quarter of 2012, compared to an income tax expense of RMB22.9 million in the corresponding period of 2011, representing a decrease of 51.1%.
Total Comprehensive Income/Loss and Earnings/Loss Per Share
Total comprehensive loss for the second quarter of 2012 was RMB27.5 million (US$4.3 million), compared to a total comprehensive income of RMB74.6 million in the corresponding period of 2011.
For the second quarter of 2012, basic and diluted loss per share was RMB0.25 (US$0.04), compared to basic and diluted earnings per share of RMB0.67 for the corresponding period in 2011.
Cash and Cash Equivalents
Cash and cash equivalents as of June 30, 2012 were RMB1,044.6 million (US$164.4 million), compared to RMB2,282.4 million as of March 31, 2012. The decrease was primarily due to the payment for trade and other payables of RMB861.6 million, investments in EPC projects of RMB170.0 million, and the investment in Huadian Energy Corporation Limited of RMB189.8 million in its initial public offering and listing on the Hong Kong Stock Exchange.
Order Book Update
New Sales Contracts – During the second quarter of 2012, Ming Yang entered into sales contracts for wind power projects with a total output of 99MW, representing 66 units of 1.5MW WTGs.
Order Backlog – As of June 30, 2012, the Company's order backlog amounted to 2.1GW representing 1,251 units of 1.5MW WTGs, 67 units of 2.5-3.0MW SCD WTGs and 1 unit of 6.0 MW SCD WTG. Cumulative signed orders since its inception amounted to 5.3GW, representing 3,380 units of 1.5MW WTGs, 84 units of 2.5-3.0MW SCD WTGs and 1 unit of 6.0MW SCD WTG.
Note to the Financial Information
The preliminary unaudited consolidated statements of comprehensive income and consolidated statements of financial position accompanying this press release have been prepared by management using International Financial Reporting Standards, or IFRSs. This preliminary unaudited financial information is not intended to fully comply with IFRSs because it does not present all of the financial information and disclosures required by IFRSs.
Solely for the convenience of readers, certain Renminbi amounts have been translated into U.S. dollar amounts at the rate of RMB6.3530 to US$1.00, the noon buying rate in New York for cable transfers of Renminbi for U.S. dollars on June 29, 2012 as set forth in the H.10 weekly statistical release of the Federal Reserve Board. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollar amounts at such a rate or at any other rate.
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "goal," "strategy" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Ming Yang's control, which may cause Ming Yang's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in Ming Yang's filings with the U.S. Securities and Exchange Commission. Ming Yang does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
Ming Yang will host an earnings conference call on Tuesday, August 28, at 8:00 am Eastern Time (5:00 am Pacific Time / 8:00 pm Beijing Time). The management team will be on the call to discuss the Company's results, operating performance and business outlook and to answer questions.
To access the conference call, please dial:
China, Domestic Mobile:
Please ask to be connected to Q2 2012 China Ming Yang Wind Power Group Earnings Conference Call and provide the following passcode: Ming Yang
Ming Yang will also broadcast a live audio webcast of the conference call. The broadcast will be available by visiting the "Investor Relations" section of the Company's web site at http://ir.mywind.com.cn.
Following the earnings conference call, an archive of the call will be available by dialing:
The replay will be archived for seven days following the earnings announcement until September 4, 2012.
About China Ming Yang Wind Power Group Limited
China Ming Yang Wind Power Group Limited (NYSE: MY) is a leading and fast-growing wind turbine manufacturer in China, focusing on designing, manufacturing, selling and servicing megawatt-class wind turbines. Ming Yang produces advanced, highly adaptable wind turbines with high energy output and provides customers with comprehensive post-sales services. Ming Yang cooperates with aerodyne Energiesysteme, one of the world's leading wind turbine design firms based in Germany, to co-develop wind turbines. In terms of newly installed capacity, Ming Yang was a top 10 wind turbine manufacturer worldwide and the largest non-state owned wind turbine manufacturer in China in 2011.
For further information, please visit the Company's website: ir.mywind.com.cn
For investor and media inquiries, please contact:
China Ming Yang Wind Power Group Limited
CHINA MING YANG WIND POWER GROUP LIMITED
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts expressed in thousands, except share and ADS data)
For the three months ended
Cost of sales
Selling and distribution expenses
Research and development expenses
Profit from operations
Share of loss of associates
Profit/(loss) before income tax expense
Income tax expense
Profit/(loss) for the period
Other comprehensive (loss)/income for the period :
Foreign currency translation differences - foreign operations
Total comprehensive income/(loss) for the period
Profit/(loss) attributable to:
Shareholders of the Company
Total comprehensive income/(loss) attributable to:
Shareholders of the Company
Basic and diluted earnings/(loss) per share (1)
(1) The calculation of the basic earnings/(loss) per share is based on the profit/(loss) attributable to the shareholders of the Company and the weighted average of ordinary shares outstanding during the relevant period.
CHINA MING YANG WIND POWER GROUP LIMITED
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Amounts expressed in thousands)
Property, plant and equipment
Investments in associates
Investments in jointly controlled entities
Trade and other receivables
Deferred tax assets
Total non-current assets
Fair value through profit or loss
Trade and other receivables
Other current assets
Pledged bank deposits
Cash and cash equivalents
Total current assets
Issued share capital
Reserve for own shares
Total equity attributable to shareholders of the Company
Deferred tax liabilities
Total non-current liabilities
Trade and other payables
Short-term bank loans
Income tax payable
Total current liabilities
Total equity and liabilities
SOURCE China Ming Yang Wind Power Group Limited