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Trina Solar Announces 2008 Fiscal Year Results

Trina Solar Limited, a leading integrated manufacturer of solar photovoltaic products from the production of ingots, wafers and cells to the assembly of PV modules, founded in 1997, announced its financial results for the fourth quarter and fiscal year 2008.


Full Year 2008 Results Financial and Operating Highlights

    -- Solar module shipments were 201.01 MW, compared to the Company's
       previous guidance of 200 MW to 206 MW, an increase of 164.8% from 2007
    -- Total net revenues were $831.9 million, an increase of 175.6% from 2007
    -- Gross profit was $164.4 million, an increase of 143.2% from 2007
    -- Gross margin was 19.8%, compared to 22.4% in 2007
    -- Net income for the full year was $61.4 million, an increase of 71.7%
       from 2007
    -- Earnings per fully diluted ADS for 2008 were $2.37, compared to $1.51
       in 2007
    -- Secured module contracts which are expected to generate approximately
       300 MW in 2009 module shipments
    -- Ranked in the top two of 14 international solar module manufacturers in
       TÜV Reinland's Energy Yield 2008 for the testing period from September
       1 to 30, 2008, as reported in January of 2009

“Despite the challenging global economic and financial climate, we are pleased with our strong performance in the fourth quarter,” said Mr. Jifan Gao, Chairman and CEO of Trina Solar. “The value of and loyalty towards our brand helped us to exceed our quarterly revenue guidance, despite sector-wide declines in the average sales price of modules. The launch of our European warehouse operations added to our fourth quarter sales by improving our delivery response time and services to customers.

By accelerating our non-silicon manufacturing cost reduction, we produced positive operating cash flows which preserved our cash balances as we reduced our short-term debt balances. We will continue to focus on generating positive operating cash flows to support our 2009 growth plan and strategic initiatives, which will focus on enhancements to our technology, cost reduction and brand recognition.

Addressing cost reduction, we achieved significant progress in our multicrystalline production, which we ramped up steeply in 2008. Based on our fourth quarter cost of approximately $0.82 per watt and targeted further reduction of 5% for the first quarter of 2009, we believe we will become one of the industry’s cost leaders with recognized high quality. Our supply chain enhancements include increased adoption of higher efficiency materials, in addition to innovative manufacturing processes currently in advanced testing stage to increase our yields and efficiencies to further reduce unit costs.

We are also pleased to share that in January of this year Trina Solar learned it had been ranked by TUV Reinland in the top two out of 14 participating international module manufacturers for specific energy yield, during TUV Reinland’s Energy Yield 2008 testing period from September 1 to 30, 2008. This underscores our committed emphasis to continually improve the quality of our material and production qualities, in addition to our customer’s pre and post sales service experience.

Although economic concerns continue to affect negatively the overall PV market, we have benefited from our strong sales capabilities and brand recognition in part due to our abilities to expand our wholesale and project related distribution channels in an increasing number of markets.”

Recent Business Highlights

During the fourth quarter of 2008, the Company benefited from:

    -- Strong customer loyalty from significant, earlier established PV
       partners throughout Europe and worldwide, who are less impacted by the
       reduced availability of commercial credit
    -- Increasing sales diversification to a total of 18 established and
       emerging PV markets, including Greece, the Czech Republic, Australia,
       and the United States
    -- Increased sales to project system integrators, which currently
       represent more than half of our total shipments
    -- Strong support from Spanish partners who are increasingly active doing
       projects outside of Spain
    -- Capacity expansion to 350MW for each of ingot, wafer, cell and module
       productions as of December 31, 2008
    -- New cell production Lines 13 and 14 being placed into commercial
    -- Launch of European warehouse operations in Rotterdam, Netherlands

The Company also announced the planned establishment of the Company’s North American operations base in San Francisco in 2009.

Full Year 2008 Results

For 2008, net revenues were $831.9 million, compared to the Company’s previous guidance of $800 million to $850 million. Total net revenue rose 175.6% from $301.8 million in 2007, primarily due to the increased shipments and offset in part by the decreased ASP. Total shipments were 201.01 MW, an increase of 164.8% from 75.91 MW in 2007. Gross profit for 2008 was $164.4 million, an increase of 143.2% from $67.6 million in 2007. Gross margin was 19.8% in 2008, compared to 22.4% in 2007. The Company’s previous 2008 guidance was from 20% to 22%.

Operating income for 2008 was $100.0 million, up 177.8% from $36.0 million in 2007. Operating margin was 12.0% in 2008, compared to 11.9% in 2007.

Net income from continuing operations for 2008 was $61.4 million, an increase of 73.5% from 2007. Net income was $61.4 million, an increase of 71.7% from 2007. Net margin was 7.4% in 2008, compared to 11.8% in 2007.

Earnings per fully-diluted ADS for 2008 were $2.37, an increase of 57% compared to $1.51 per fully diluted ADS for the full year 2007.

Financial Condition

As of December 31, 2008, the Company had $177.2 million in cash and cash equivalents, and restricted cash. The Company’s working capital balance was $84.2 million. Total bank borrowings stood at $263.2 million, of which $14.6 million were long-term borrowings. Shareholders’ equity was $433.1 million, up slightly from $432.7 million at the end of the third quarter of 2008.

The Company increased the effective capacity of its foreign currency hedging program during the fourth quarter of 2008 involving forward currency contracts between the Euro and US dollar currencies, with goal to mitigate possible negative effects of exchange rate volatility.

About Trina Solar Limited

Trina Solar Limited (NYSE: TSL) is a well recognized manufacturer of high quality modules and has a long history as a solar PV pioneer since it was founded in 1997 as a system installation company. Trina Solar is one of the few PV manufacturers that has developed a vertically integrated business model from the production of monocrystalline and multicrystalline ingots, wafers and cells to the assembly of high quality modules. Trina Solar’s products provide reliable and environmentally-friendly electric power for a growing variety of end-user applications worldwide. For further information, please visit Trina Solar’s website at http://www.trinasolar.com