ZHONGSHAN, China, June 1, 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 first quarter ended March 31, 2012.
First Quarter 2012 Financial Highlights:
Mr. Chuanwei Zhang, Chairman and CEO of Ming Yang, commented on the first quarter results, "The growth of China's wind power industry is slowing down with a more stringent project approval process, a step in the evolution of the industry. Increased price competition and decreased demand also trimmed the margins of China's WTG manufacturers. Against this backdrop and coupled with continued adverse winter weather, our performance in the first quarter was adversely impacted. Gross margin in the quarter, however, showed moderate improvement compared with the previous quarter, primarily due to a more stable average selling price ("ASP")."
"It is expected that the wind power industry in China will continue to face challenges, with an estimated further reduced newly installed capacity in 2012. Nevertheless, the unusually demanding industry environment may prompt further market consolidation from which we believe we will benefit as a leading market player."
"As the largest non-state owned WTG manufacturer in China and a top ten WTG manufacturer globally, we believe Ming Yang is well-positioned to continue to strengthen its leading market position with a sharp focus on product quality, research and development, innovative business model and cost competitiveness. We are confident that we can capitalize on market opportunities in China and the international markets and retain our competitiveness both during and after this market downturn."
Mr. Zhang continued: "We are pleased to announce two new appointments which represent our commitment to strengthen the breadth and depth of the management team of the international markets. With Mr. Manfred Loong's stature and extensive experience with multinationals and our Company, he has been promoted to CEO of Ming Yang International because he is the best candidate to carry out our strategic overseas investments and international expansion initiatives going forward. We are also pleased to welcome Mr. Vincent Pang to our senior management team as our new CFO. Mr. Pang has an impressive background reinforced with extensive finance and accounting expertise, and we look forward to the significant benefits he will bring to Ming Yang."
First Quarter 2012 Unaudited Financial Results
Revenue in the first quarter of 2012 was RMB406.6 million (US$64.6 million), representing a decrease of 70.9% from RMB1,397.3 million in the corresponding period of 2011. WTGs for which revenue was recognized amounted to an equivalent wind power project output of 120MW, or 80 units of 1.5MW WTGs, compared to 297MW, or 198 units of 1.5MW WTGs, for the corresponding period in 2011. The decrease in revenue in the first quarter was primarily due to delays in installation and commissioning of 1.5MW WTGs on a number of wind farm projects caused by adverse weather conditions and overall decreased market demand in China.
Gross Profit and Gross Margin
Gross profit in the first quarter of 2012 was RMB40.5 million (US$6.4 million), representing a decrease of 88.9% from RMB363.8 million for the corresponding period in 2011. Gross margin in the first quarter of 2012 was 10.0%, compared to 26.0% for the corresponding period in 2011. The year-over-year decline was a result of a significant decrease in ASP compared to the first quarter of 2011 when the Company experienced an exceptionally favorable mix of higher margin sales contracts for WTGs commissioned in that period.
Selling and Distribution Expenses
Selling and distribution expenses were RMB70.3 million (US$11.2 million) for the first quarter of 2012, compared to RMB37.6 million for the corresponding period in 2011, representing an increase of 87.1%. In response to intensified market competition, the Company incurred more marketing and bidding expenses during this period to maintain its order backlog.
Administrative expenses were RMB50.2 million (US$8.0 million) for the first quarter of 2012, compared to RMB54.2 million for the corresponding period in 2011, representing a decrease of 7.3%, primarily due to a decrease in share-based compensation.
Research and Development Expenses
Research and development expenses were RMB18.6 million (US$2.9 million) for the first quarter of 2012, compared to RMB15.9 million for the corresponding period in 2011, representing an increase of 17.0%. This increase was primarily due to research and development costs incurred with respect to the development of the Company's SCD WTGs.
Net Finance Expense
Net finance expense was RMB48.2 million (US$7.6 million) for the first quarter of 2012, compared to a net finance income of RMB8.8 million in the corresponding period of 2011. This increase was primarily due to the fees paid to a bank for the arrangement of finance leases for the Company's customers for the settlement of its trade receivables, and interest of the Company's RMB-denominated unsecured three-year medium term notes issued in January 2012.
Profit/Loss Before Income Tax Expense/Benefit
Loss before income tax benefit was RMB126.0 million (US$20.0 million) for the first quarter of 2012, compared to a profit before tax expense of RMB268.2 million in the corresponding period of 2011.
Income Tax Expense/Benefit
Income tax benefit was RMB10.5 million (US$1.7 million) for the first quarter of 2012, compared to an income tax expense of RMB41.6 million in the corresponding period of 2011. The income tax benefit was primarily due to the recognition of deferred tax assets on tax losses during the period.
Total Comprehensive Income/Loss and Earnings/Losses per Share
Total comprehensive loss for the first quarter of 2012 was RMB116.2 million (US$18.5 million), compared to a total comprehensive income of RMB218.8 million in the corresponding period of 2011.
For the first quarter of 2012, basic and diluted loss per share was RMB0.93 (US$0.15), compared to basic and diluted earnings per share of RMB1.80 for the corresponding period in 2011.
Cash and Cash Equivalents
Cash and cash equivalents as of March 31, 2012 were RMB2,282.4 million (US$362.4 million), compared to RMB1,339.5 million as of December 31, 2011. The increase was primarily due to the proceeds received from the issuance of the Company's RMB-denominated unsecured three-year medium-term notes in January 2012.
Order Book Update
New Sales Contracts – During the first quarter of 2012, Ming Yang entered into sales contracts for wind power projects with a total output of 229.5MW, representing 149 units of 1.5MW WTGs and 1 unit of 6.0MW SCD WTG.
Order Backlog – As of March 31, 2012, the Company's order backlog amounted to 2.2GW. Cumulative signed orders since its inception amounted to 5.2GW.
Orders awarded and pending contract signing amounted to 1.2GW as of March 31, 2012.
Share Repurchase Program
During the first quarter of 2012, the Company repurchased 903,946 ADSs, representing 903,946 ordinary shares, for an aggregate consideration of US$2.1 million (including commissions), under its share repurchase program. Since the inception of the program, Ming Yang has repurchased an aggregate of 3,153,897 ADSs, representing 3,153,897 ordinary shares, for an aggregate consideration of US$8.7 million including commissions.
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 RMB6.2975 to US$1.00, the noon buying rate in New York for cable transfers of Renminbi for U.S. dollars on March 30, 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 Friday, June 1, 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:
United States toll-free:
China, domestic mobile:
Please ask to be connected to Q1 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 June 7, 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:
Investor and Media Contacts:
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-month period ended
Cost of sales
Selling and distribution expenses
Research and development expenses
Profit/(loss) from operations
Share of loss of associates
Profit/(loss) before income tax expense
Income tax (expense)/benefit
Profit/(loss) for the period
Other comprehensive loss 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
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