Yingli Green Energy (YGE) Tops Q2 EPS Views; Updates on Debt Repayment, Alr. Financing Plans

August 23, 2016 6:32 AM EDT
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Yingli Green Energy (NYSE: YGE) reported Q2 EPS of $0.90, $1.25 better than the analyst estimate of ($0.35). Revenue for the quarter came in at $379.8 million versus the consensus estimate of $408.13 million.

Total photovoltaic ("PV") module shipments1 were 662.0MW, compared to 508.1MW in the first quarter of 2016.

Updates on Debt Repayment and Alternative Financing Plans

As of the date of this press release, the Company's subsidiaries had medium-term notes, or MTNs, of RMB2,057.0 million outstanding, including RMB357.0 million of the MTNs issued in 2010 (the "2010 MTNs"), which became due on October 13, 2015; RMB1.4 billion of the MTNs issued in 2011 (the "2011 MTNs"), which became due on May 12, 2016; and RMB300.0 million of the MTNs issued in 2012 (the "2012 MTNs"), which will become due on May 3, 2017. As the Company previously announced on June 29, 2016, the lead underwriter of the 2010 MTNs and 2011 MTNs had announced resolutions passed by holders of the MTNs after meetings between the Company's subsidiaries and the MTN holders. The Company has continued its negotiation with the holders of the 2010 MTNs and 2011 MTNs about revisions to the repayment schedules of the MTNs. In addition to making efforts to improve its financial performance, the Company continues to discuss with different funding sources about alternative financing plans, such as 1) introduction of strategic investors to invest into the Company or its subsidiaries, 2) introduction of new creditors to grant new borrowings to the Company or its subsidiaries, and 3) sales of certain long-lived assets including land use rights to obtain additional funds. As of the date of this press release, the Company has not reached any agreement with the holders of the MTNs or any other party with respect to any concrete financing plan or plan for repayment of the MTNs yet.

As of the date of this press release, the Company and its subsidiaries had approximately RMB2,129 million in unutilized short-term lines of credit and approximately RMB2,307 million in committed long-term facilities. The Company's subsidiaries had successfully renewed or extended over half of their loans from major lending banks and also reduced the interest rates of some of these loans. Given the Company's continued need for short-term financing, the Company's subsidiaries have been negotiating with their lending banks for the extension of their remaining loans, including a loan with outstanding amount of RMB99.1 million overdue as of the date of this press release. The Company and its subsidiaries are exploring financing options to continue to manage the Company and its subsidiaries' liquidity and to enhance their financial flexibility.

Business Outlook for Third Quarter 2016

Based on current market conditions, the Company's current operating conditions, estimated production capacity and forecasted customer demand, the Company expects its PV module shipments to be in the estimated range of 300MW to 400MW for the quarter ending September 30, 2016. The Company also expects its gross margin in the third quart of 2016 to be in the estimated range of 12.5% to 14%.

For earnings history and earnings-related data on Yingli Green Energy (YGE) click here.

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