CNPV Files Consolidated Financial Report with NYSE-Euronext for First Half 2010


LUXEMBOURG / DONGYING, PR China, October 31, 2010 /PRNewswire-Asia/--CNPV Solar Power SA, a public limited liability company organized under the laws of the Grand Duchy of Luxembourg and a leading integrated manufacturer of solar photovoltaic products, today announced that its Interim Consolidated Financial Report for the first half year ended June 30, 2010 has been filed with the Alternext of Paris NYSE-Euronext: ALCNP. The Interim Financial Report can be accessed via the investor relations section of the Company's website at http://www.cnpv-power.com

"We are extremely pleased with our strong performance in the first half of 2010."We met our half year 2010 targets for product shipments, revenues and profits despite significant Euro currency pressures" stated jointly Mr. Zhang Shunfu, CNPV's CEO and B. Veerraju Chaudary, CNPV's COO, CTO & Member of the Board.

"Our increasing global brand recognition and ongoing commitment to continuously satisfying customer expectations resulted in double digit shipments and a triple digit revenue increase in the first half of 2010 over the same period in 2009. Due to our strong execution capability, we achieved consistently healthy margins by streamlining our manufacturing processes, enhancing our supply chain gains, and implementing innovative technologies to enhance our manufacturing capabilities. We see increasing evidence that strong demand for our PV products will extend well into 2011, and we are currently looking into how best to manage capacity expansion to capture increasing global market opportunities."

"We continue to focus efforts to lower our product manufacturing costs through continuous improvements in technology development and manufacturing process innovation as we increase our production capacity and execute on our technology roadmap. These developments are central to our three core long-term strategies: developing a strong brand in the global marketplace, investing continuously in our technology platform and ensuring our low cost position through our balanced vertically and horizontally integrated business model."

First Half 2010 Financial and Operating Results Highlights

  • Revenue of €107.2 million; increased 527.8% over the first half of 2009
  • Shipments of 69.0 MWp; increased 1119.2% over the first half 2009
  • Gross profit was €16.5million, an increase of 320.35% over the first half 2009.
  • Gross margin was 15.3% compared to 22.9% in the first half 2009

(in € millions)

Fiscal Year H1 2010

Fiscal Year H1 2009

Change

Revenue

107.2

17.1

+527.8%

Gross Profit

16.5

3.9

+320.2%

Gross Margin

15.4%

22.9%

-7.7%t

Operating Income

12.2

2.87

+326.4%

Operating Margin

11.4%

16.8%

-5.4%

Net Income

3.4

2.1

+61.7%

The First Half 2010 financial statements have been audited by Grant Thornton Lux Audit S.A., a Luxemburg audit firm and a member of the international Grant Thornton audit services network.

First Half Year 2010 Financial and Operational Results

• Net Revenues
Net revenues for the first half 2010 were €107.2 million, which increased by 527.8% from €17.1 million in the first half 2009. The increase was primarily due to a significant rise in total shipments of PV Modules, which increased to 69.0 MWp (CNPV branded PV Modules Sales: 66.9 MWp; Domestic Project Sales: 2.2 MWp) in the first half 2010 from 5.7 MWp in the first half 2009. The increase in total shipments was primarily due to the Company's expanded market share in Europe, Australia, Nepal, Bangladesh and mainland China, supported by the completion of an additional 100 MWp of total production capacity of PV modules.

• Gross Profit and Margin

Gross profit for the first half 2010 was €16.5 million, which increased by 320.2% from €3.9 million in the first half 2009. Gross margin was 15.4% for the first half 2010, compared to 22.9% in the first half 2009. The lower gross margin as a percentage of revenue for the first half 2010 was primarily due to significantly larger overseas sales and a decline in domestic project contributions.

• Operating Expenses
Operating expenses for the first half 2010 were €4.2 million, an increase of 306.7% from €1.0 million in the first half of 2009. The increase in operating expenses was primarily due to higher selling and distribution costs related to aggressive overseas market expansion. Operating expenses as a percentage of net revenues decreased to 3.9% in the first half 2010 from 6.1% in the first half 2009 due to exponential growth in net revenues.

• Interest Expense
Interest expense for the first half 2010 was €1.8 million, an increase of 513.8% from €0.3 million in the first half of 2009. The increase in interest expense was consistent with the increase in short-term borrowings to fund working capital requirements for increased sales.  The interest expense rose from €12.76 million as of June 30, 2009 to €41.0 million as of June 30, 2010 and the long-term borrowings from €0.0 million as of June 30, 2009 to €6.01 million as of June 30, 2010. The weighted average interest rate for these borrowings in the first half 2010 was 5.2% and Borrowings were denominated in renminbi.

Foreign Exchange Gain/Loss
The foreign exchange loss on the translation of financial statements of foreign operations in the first half 2010 was €7.0 million compared to €0.1 million in the first half 2009. The increase is mostly due to the euro depreciation versus the renminbi.

• Net Income
Net income was €3.4 million and fully diluted earnings per ordinary share were €0.7 for the first half 2010.

• Production Capacity

The annual production capacity has increased from 200MWp to 300MWp during the first half 2010 compared to the same period last year.

• Brand Recognition
CNPV invested significantly in overseas marketing and building foreign sales channels in the first half 2010. The Company is strategically increasing its brand recognition in Europe and Asia. These marketing efforts are made in parallel with consistently delivering world class product quality and stability, supported by advanced manufacturing technology and stringent quality control.



For the second half of 2010, the Company expects to ship between 80 MW to 90 MW of PV modules. The Company expects its gross margin relating to its in-house cell to module production to be in the mid 20s in percentage terms during the second half of 2010. The Company believes its overall gross margin, taking into account wafer and cell requirements outsourced to third party suppliers to meet demand in excess of its internal capacity, for the second half will be approximately 15%.

Operations and Business Outlook for 2010

Cost Reduction and Materials Procurement
By year end 2010 the Company expects further reduction of 10% to 15% through a combination of technology and manufacturing process improvements, including supply chain and logistics management initiatives currently under testing or development. Through the Company's diversified range of short, medium, and long-term supply contracts, which include agreements entered into in the first quarter of 2010, the Company will continue to maintain competitive materials costs relative to the current market price.

Technology and Product Development Update

The Company is currently improving its Process Technology, including implementation of enhanced anti reflection coated glass, larger dia meter of cells, high conductivity ribbon materials, passivation and metallization techniques involved in the photovoltaic manufacturing process value chain technology, with target year end cell efficiency goals of up to 18.0% and 17.0% respectively for its Monocrystalline and Multicrystalline product lines. The Company also plans to further enhance its BIPV and Roof Tile Module product development. The company intends to develop and offer high density power range premium series modules with same foot print of industry average power module to our entire customers to differentiate from our competitors which will enable us to make our customer delight.

Sales Outlook
As a result of strong demand for its module products in both European and non-European markets, the Company expects to increase its shipment volume in the second half of 2010 compared to the first half. For the full year of 2010, the Company expects total PV module shipments to be between 155 MW and 160 MW, compared to its earlier guidance of between 125 MW to 150 MW, representing an increase of 300% to 310% from 2009.

The consolidated financial statements, as well as the Half Year 2010 auditor’s report, are available on the company's website:
http://www.cnpv-power.com.

ISIN Code: LU0379220212-Alternext stock code: ALCNP 

About CNPV
CNPV Solar Power SA (NYSE Euronext: ALCNP), through its wholly-owned subsidiary, CNPV Dongying Solar Power Company Limited, is a leading integrated manufacturer of solar photovoltaic products from the production of ingots, wafers and cells to the assembly of PV modules. CNPV designs, manufactures and supplies highly efficient and cost effective crystalline solar photovoltaic modules. Reliability & longevity are built into our world-class crystalline solar photovoltaic modules, which undergo rigorous internal tests and external certifications (IEC61215, IEC61730, UL, and CE) to ensure peak performance and safety. For further information, please visit CNPV's website at
http://www.cnpv-power.com

Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, CNPV's ability to raise additional capital to finance its activities; the effectiveness, profitability, and marketability of its products; the future trading of the securities of the Company; the ability of the Company to operate as a public company; the period of time for which its current liquidity will enable the Company to fund its operations; the Company's ability to protect its proprietary information; general economic and business conditions; the volatility of the Company's operating results and financial condition; the Company's ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the Company's filings with the Euronext in Paris. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

For more information, please contact:

CNPV Solar Power SA
B.Veerraju Chaudary, COO, CTO & Member of the Board
Phone: +86-13656-473355,
Email:
chaudary@cnpv-power.com

James Qi, CFO 
Bill Milewski, VP-Investor Relations,
Phone: +86-546-5888
E-mail:
ir@cnpv-power.com

SOURCE:  CNPV Solar Power SA

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