Highlights:
Gross margin up 11.6% to 16.3%, (2007 : 14.6% (restated)
Pre Tax Profit up 328% to $20.1m (2007 : $4.7m (restated)
Adjusted EBITDA (excl. foreign exchange losses) up 315% to $34.5m (2007: $8.3m (restated)
Pro-forma earnings per share up 160% to $ 24.0 cents (2007 : $ 9.2 cents (restated)
Cell manufacturing capacity doubled in the year to 100 megawatt (MW) pa (2007: 50 MW); module capacity increased to 60 MW pa (2007: 40 MW).
Total PV module shipments were 45.2 MW, representing an increase of 451% from 8.2 MW in 2007.
Jetion was named the Fastest-Growing company in Deloitte Technology Fast 50 China 2008 and #2 in Deloitte Technology Fast 500 Asia Pacific 2008.
2007 reporting figures have been restated, please refer to below for the details of prior year adjustments.
Operations:
In 2008, the company recorded significant improvements in the majority of its performance targets. In particular, we have made substantial progress as regards to our product mix, technology standards, product quality and inventory control.
Sales of solar modules increased from 22.6% of total sales in 2007 to 76.6% in 2008, which contributed to the overall increase in profit margins. The company has transformed itself into a major manufacturer of solar modules having had market sales of predominately solar cells prior to 2008. As we have developed our sales channels, the company further expanded its sales coverage from Germany and Spain to other European countries. In 2008, the revenue breakdown was between China (c. 24%), Germany (c. 56%), Spain (c. 16%), Italy (c. 2%) and other emerging markets (c. 2%). Through our expanding sales channels, we have widened our customer base and have established a sound relationship with a number of respected solar buyers, such as Schüco, Mage Solar and Bayerische Solar.
In 2008, we substantially improved the conversion efficiency of our solar cells. Our average conversion efficiency rate reached 17% compared to the maximum conversion efficiency rate under mass production of 18%. This improvement is attributable to our continued emphasis on and efforts into R&D, process upgrades and technical excellence. Through consistent improvement, our technology team not only generated a significant increase in the conversion efficiency rate of monocrystalline solar cells, but it also fully mastered the technology of high efficiency polycrystalline solar cells and UMG solar cells. These technological advances have enabled us to offer a more diversified product mix to our customers and provided strong post-sales support and services for our customers.
After obtaining the European TUV accreditation in October 2007, we applied for the key (Underwriters Laboratories) UL product certification for the US and Canadian markets. The company was granted this accreditation in March 2009, providing validation that the company’s products are in compliance with the same strict international requirements on product quality and safety as our counterparts in Europe and the US and will provide the company with significant leverage for entering into new markets such as the US and Canada. Concurrently, ongoing improvements in our product quality and efficiency also bore fruit with a yield of over 98% and a utilization rate of over 90%. We believe that the quality of our product compares favorably with our most advanced competitors worldwide.
Commenting on the results Chairman Gabriel Kow said:
I am delighted to report another year of strong growth during 2008. Despite the turbulent market conditions that emerged in fourth quarter of 2008, the company has established a strong foundation to deal with the challenges ahead. I continue to be optimistic about the company in 2009 and strongly believe that we will continue to move forward in accomplishing our goals.
Chairman Gabriel Kow Statement:
2008 has been a year of fast growth for Jetion Holdings Limited. In the second half of 2008, the solar cell production capacity of the company doubled from 50 MW p.a. to 100 MW p.a. and the module capacity increased from 40 MW p.a. to 60 MW p.a. This expansion of our production capacity has enabled Jetion to capture a greater proportion of the value chain by increasing the proportion of solar modules in its product and revenue mix.
In 2008, the company made significant improvements to its cost controls, conversion efficiency rates, brand building and customer relations. All these have enabled the company to meet its performance targets for the year and to steadily improve its market profile and enhance its service to customers.
The integration of the production chain has transformed the company into a manufacturer of both solar cells and modules. The company is now equipped with wafer slicing capacity as well as solar cell and module production, allowing us to offer high quality module products to our customers.
The solar industry remains one of the world’s fastest growing industries. We continue to achieve substantial sales growth and increasing recognition from customers in Europe where solar applications are becoming sophisticated. We aim to expand our customer base in Europe and are well-positioned to enter new overseas markets, such as the US. It is highly encouraging to see many governments implementing plans to encourage solar applications such as the subsidy policy issued by the PRC government in March 2009 for PV applications market in China.
Since its listing on AIM in July 2007, the majority of the company’s short term growth plans have been achieved. Despite unsettled market conditions, particularly in the last quarter of 2008. During 2008, the company recorded sales revenue of $250.9 million and adjusted EBITDA (excluding foreign exchange losses) of $34.5 million, representing increases of 141.3% and 315.6% respectively over 2007, in the current economic conditions.
The company has been facing the challenges of falling prices, and slowing demand from Europe since fourth quarter of 2008. Nevertheless, the partial offset of falling input prices and the overall performance for the preceding three quarters has enabled us to meet our annual performance targets. The efforts of our staff have helped us operate soundly and safely through this difficult time with enthusiasm, confidence and relentless efforts.
As Chairman, I am delighted to witness the strong growth of the company during 2008. Despite the turbulent market conditions that emerged from fourth quarter of 2008, the company has established strong foundations to deal with the challenges ahead. I continue to be optimistic about the company in 2009 and strongly believe that we will continue to move forward in accomplishing our goals.
I would like to take this opportunity to thank our directors, officers and staff for their passion in the solar business and their perseverance in achieving our objectives and solid results in 2008. At the same time, I would also like to thank all our investors for their continued support and trust in the company.
Chief Executive’s Review:
2008 has been an extraordinary year for the team during which we achieved very satisfactory results despite turbulent market conditions. As a result of our production capacity expansion, our solar cell production capacity reached 100 MW p.a. in mid-2008. The solar cell output for the year amounted to 65.3 MW (2007: 35.2 MW) and solar module output amounted to 43.3 MW (2007: 8.2 MW) with an average conversion efficiency of 17% (2007: 16.5%). Shipments of solar cells were 18.2 MW (excluding processing income) and shipments of solar modules were 45.2 MW. Sales revenue for the year reached $250.9 million (2007: restated* $104.0 million) and gross profit was $40.8 million (2007: restated* $15.2 million). Both the sales revenue and profitability of the company have increased significantly when compared to 2007.
