They have just produced some pretty ordinary numbers (as pre-announced) but it the massive changes in their balance sheet that are really interesting.
Trina Solar Limited | ||||||||
Unaudited Consolidated Balance Sheet | ||||||||
(US dollars in thousands) | ||||||||
June 30 | March 31 | June 30 | ||||||
2011 | 2011 | 2010 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ 630,978 | $ 489,820 | $ 639,517 | |||||
Restricted cash | 53,260 | 64,813 | 45,758 | |||||
Marketable Securities | 315 | 426 | 443 | |||||
Inventories | 226,303 | 179,780 | 96,395 | |||||
Project assets | 43,472 | 42,110 | 23,877 | |||||
Accounts receivable, net | 584,046 | 542,967 | 313,042 | |||||
Current portion of advances to suppliers | 64,049 | 82,370 | 42,895 | |||||
Prepaid expenses and other current assets, net | 101,948 | 90,297 | 53,256 | |||||
Total current assets | 1,704,371 | 1,492,583 | 1,215,183 | |||||
Property, plant and equipment | 751,480 | 663,851 | 533,795 | |||||
Project assets- long term | 2,614 | - | - | |||||
Prepaid land use right | 36,661 | 36,854 | 27,139 | |||||
Advances to suppliers - long-term | 129,138 | 94,807 | 87,205 | |||||
Investment in affiliates | 320 | 319 | - | |||||
Deferred tax assets | 14,667 | 15,405 | 10,481 | |||||
Other noncurrent assets | 28 | 196 | 1,352 | |||||
TOTAL ASSETS | $ 2,639,279 | $ 2,304,015 | $ 1,875,155 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term borrowings, including current portion of long-term debt | $ 342,953 | $ 153,286 | $ 161,557 | |||||
Accounts payable | 315,004 | 253,223 | 197,789 | |||||
Convertible note payable | 137,870 | 137,065 | ||||||
Income tax payable | 20,139 | 46,656 | 9,436 | |||||
Accrued expenses and other current liabilities | 130,305 | 132,487 | 60,220 | |||||
Total current liabilities | 946,271 | 722,717 | 429,002 | |||||
Long-term bank borrowings | 382,631 | 295,652 | 331,152 | |||||
Convertible note payable | - | - | 134,644 | |||||
Accrued warranty costs | 50,205 | 44,194 | 27,508 | |||||
Other noncurrent liabilities | 17,223 | 18,454 | 14,740 | |||||
Total liabilities | 1,396,330 | 1,081,017 | 937,046 | |||||
Ordinary shares | 40 | 40 | 40 | |||||
Additional paid-in capital | 646,925 | 644,628 | 638,457 | |||||
Retained earnings | 579,183 | 567,423 | 291,572 | |||||
Other comprehensive income | 16,601 | 10,707 | 8,040 | |||||
Total shareholders' equity | 1,242,749 | 1,222,798 | 938,109 | |||||
Non-controlling interest | 200 | 200 | - | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 2,639,279 | $ 2,304,015 | $ 1,875,155 | |||||
Cash went up from $490 million to $631 million - an increase of $141 million.
But that was the end of the balance sheet good news.
Short term debt went up from $153 to $343 million. They borrowed $190 million short term.
And long term debt went up from $296 to $383 million. They borrowed another $87 million.
So another way to look at it is that the company chewed through a net (190+87-141=) 136 million despite their (much lower) stated profit.
What gives? Its a widget company with stated profit but cash burn.
Actually we know what gives - the company still can't sell their product to customers that actually pay.
Inventory went up from $180 to $226 million. This company is still shipping to warehouses...
Receivables went up from $543 to $584 million. So they are selling to people who are slow to pay (but who have probably already received irrevocable delivery of solar panels and installed them into levered solar parks. (The project financier almost certainly has the collateral now!)
The rest of the cash burn wasn't really burn - it was (another) large increase in capacity. These increases are happening despite the obvious problems this company has in selling its inventories.
As I said - the banks are very understanding.
And they will need to be because the company has contracted to buy lots more silicon and it needs to increase its output substantially. They tell us that the silicon price will be lowered in accordance with the contract. That is great: they are going to need it.
Today at my office in Sydney I was cold-called by a solar panel installer. Business is quiet so they were drumming up business. They want to sell me panels at an installed price (with inverters etc). The panel price was $1.35 per watt. Not kidding - way below where Trina is currently booking sales.
The brand was Alex Panel - another company which the salesman assured me was "planning to list on the New York Stock exchange".
Trina say next quarter will be better. At $1.35 per watt sold by retail-cold-call in Sydney I don't quite see it.
John
