Sky Solar Holdings, Ltd. (NASDAQ:SKYS) (“Sky Solar” or “the
Company”), a global developer, owner and operator of solar parks,
today announced its financial results for the third quarter of 2016
ended September 30, 2016.
Quarter Highlights:
- Q3 2016 total revenue of
$23.4 million,
up 93.4% over Q3 2015
- Q3 2016 electricity revenue of $17.9
million, up 58.8% over Q3 2015
- Q3 2016 Adjusted EBITDA of
$21.4 million,
compared to $3.8 million in Q3
2015, up 466.7% year-over-year;
Q3 2016 annualized Adjusted EBITDA return on equity ratio of
56.2%1
- 152.1 MW of solar
parks assets in operation as of September 30, 2016.
- As of September 30, 2016,
90.7 MW
under construction,
172.2
MW of shovel-ready projects, and 1.0 GW of solar parks in
pipeline.
Business Updates (to date):
- Established partnership with a new strategic investor
and closed on two transactions in Canada with this
partner
- Closed on IDB financing to continue construction of
remaining 62.5MW project in Uruguay
- Closed on refinancing term-loan for recently acquired
23MW portfolio in the US
- Recent sale of 23MW solar park in Greece for a
total price of Euro39.7
million
Mr. Weili Su, Founder, Chairman and Chief executive officer of
Sky Solar, commented, “We are pleased with our quarterly results
and remain focused on establishing new strategic partnerships,
efficient utilization of capital and delivering growth in our key
target markets. We are also pleased to report recent project
financing with the Inter-American Development bank, sold preferred
equity of our projects in Canada to new strategic investor, and
closed on a refinancing of our operating portfolio in the US. We
believe we are uniquely positioned and have a very bright future in
the renewable energy industry and appreciate the support of our
shareholders.”
Mr. Sanjay Shrestha, Chief Investment Officer of Sky Solar, and
President of Sky Capital America commented, “As Mr. Su highlighted,
we are pleased with our continued success to reduce overall cost of
capital, strategically utilizing capital and investing in
core growth markets. As a result of our efforts to monetize
certain solar parks to unlock shareholder value, given our recent
sale of equity in our Canadian assets the sale of Greek
assets, and refinancing of our existing portfolio, we believe we
have sufficient liquidity to execute on our near term growth
objectives. ”
Third Quarter 2016 Financial Results
Revenue was $23.4 million, up 93.4% from $12.1 million in the
same period of 2015.
Electricity sales were $17.9 million in the third quarter of
2016, up 58.8% from $11.3 million in the same period of 2015. The
year-over-year growth in electricity sales was primarily due to the
increase in the Company’s operational IPP assets globally.
Electricity sales in the third quarter of 2016 was up 14.7% from
$15.6 million in the second quarter of 2016, due to seasonally
higher solar irradiation across most of the Company’s major
geographic markets.
Systems and other sales were $5.4 million in the third quarter
of 2016, up 599.2% from $775 thousand in the same period of 2015.
The year-over-year increase in systems and other sales was primary
due to the sales of solar parks in Canada. Systems and other sales
in the third quarter of 2016 were up 299.3% from $1.4 million in
the second quarter of 2016, primarily due to the same reason.
The following table shows the Company’s sequential and
year-over-year change in revenue for each category, geographic
region and period indicated.
|
Q3 2016 |
Sequential
Change |
Q2 2016 |
Year-Over-Year
Change |
Q3 2015 |
|
(US$ in thousands, except
percentages) |
Asia |
11,128 |
8.7 |
% |
10,242 |
78.0 |
% |
6,250 |
Electricity Sales |
10,263 |
4.7 |
% |
9,804 |
69.2 |
% |
6,065 |
System
Sales and Other |
865 |
97.5 |
% |
438 |
367.6 |
% |
185 |
Europe |
4,232 |
-4.6 |
% |
4,436 |
-2.0 |
% |
4,318 |
Electricity Sales |
3,763 |
-2.8 |
% |
3,870 |
0.9 |
% |
3,728 |
System
Sales and Other |
469 |
-17.1 |
% |
566 |
-20.5 |
% |
590 |
South
America |
119 |
-70.9 |
% |
409 |
|
|
Electricity Sales |
111 |
-12.9 |
% |
127 |
|
|
System
Sales and Other |
8 |
-97.1 |
% |
282 |
|
|
North
America |
7,882 |
312.9 |
% |
1,909 |
422.3 |
% |
1,509 |
Electricity Sales |
3,805 |
107 |
% |
1,838 |
152.2 |
% |
1,509 |
System
Sales and Other |
4,077 |
5,642 |
% |
71 |
100 |
% |
- |
Electricity
Sales |
17,942 |
14.7 |
% |
15,639 |
58.8 |
% |
11,302 |
System Sales
and Other |
5,419 |
299.3 |
% |
1,357 |
599.2 |
% |
775 |
Cost of sales and services were $10.1 million, compared to $3.6
million in the same period in 2015. The increase was mainly a
result of the increase of system sales in Canada during the third
quarter of 2016.
Gross profit was $13.2 million, up 56.3% from $8.5 million in
the same period in 2015. Gross margin decreased to 56.6% from 70.0%
in the same period in 2015 because of the higher percentage of
revenue contribution from system sales and others, which had lower
margin compared to electricity sales.
Selling, general and administrative (“SG&A”) expenses were
$8.7 million, up 37.4% from $6.3 million in the same period in 2015
due to the increased professional service fee.
A gain on disposal of interest in subsidiaries was $9.8 million
for the sale of preferred share interest in a manner that
constituted the sale of a majority of the economic interests of 6MW
solar parks in Canada to a new strategic investor.
Operating profit was $15.2 million in the third quarter of 2016,
up 951.7% compared to $1.4 million in the same period in 2015 due
to the increase of operating IPP assets and sale of preferred share
interest in 6MW solar parks in Canada.
Finance costs were $2.4 million, compared to $1.1 million in the
same period of 2015. The increase in finance costs was primarily
due to the increased average balance of bank loans in the third
quarter in 2016.
Other non-operating income was $500 thousand compared to other
non-operating expense of $4.1 million in the same period of 2015.
Other non-operating expenses for the third quarter of 2015 were
primarily due to the fair value fluctuation of financial
liabilities.
As a result of the above, the net profit for the third quarter
of 2016 was $14.2 million, compared to a net loss of $5.6 million
in the same period in 2015.
Basic earnings per share was $0.03 and diluted earnings per
share was $0.04 compared to a loss per share of $0.01 in the same
period in 2015. Basic and diluted earnings per ADS were $0.28
compared to a basic loss per ADS of $0.12 and diluted loss per ADS
of $0.11 in the same period in 2015.
Adjusted EBITDA was $21.4 million, compared to $3.8 million in
the same period in 2015.
Pipeline Analysis
As of September 30, 2016, the Company owned and operated 152.1
MW of IPP assets, compared to $133.1 MW as of June 30, 2016.
The Company had 90.7 MW of projects under construction as of
September 30, 2016, comprised of a 28.2 MW project in Japan and
62.5 MW project in Uruguay. This compares to 27.9 MW under
construction as of June 30, 2016.
In total, the Company had 1.2 GW of projects in various stages
of development as of September 30, 2016, which included the
projects under construction described above as well as 172.2 MW of
shovel-ready projects and more than 1.0 GW of projects in pipeline.
This does not include any incremental opportunities associated with
project opportunities in the U.S.
Balance Sheet and Liquidity
As of September 30, 2016, the Company had bank balances and cash
of $26.5 million, restricted cash of 55.6 million, trade and other
receivables of $43.6 million and IPP solar park assets of $359.8
million. Total borrowing was $162.3 million, including $24.9
million of borrowing due within one year.
Use of Non-IFRS Measures
To provide investors with additional information regarding the
Company’s financial results, the Company has disclosed Adjusted
EBITDA and annualized Adjusted EBITDA return on equity ratio,
non-IFRS financial measures, below. The Company presents these
non-IFRS financial measures because they are used by the Company’s
management to evaluate its operating performance. The Company also
believes that these non-IFRS financial measures provide useful
information to investors and others in understanding and evaluating
the Company’s consolidated results of operations in the same manner
as the Company’s management does and in comparing financial results
across accounting periods and to those of its peers.
Adjusted EBITDA, as the Company presents it, represents profit
or loss for the period before taxes, depreciation and amortization,
adjusted to eliminate the impacts of share-based compensation
expenses, impairment charges, interest expenses, fair value changes
of financial liabilities, loss from hedge ineffectiveness on cash
flow hedges and reversal of tax provision.
Annualized Adjusted EBITDA return on equity ratio is Adjusted
EBITDA of the applicable quarter multiplied by four, and divided by
total equity as of the applicable quarter end.
The use of Adjusted EBITDA and annualized Adjusted EBITDA return
on equity ratio has limitations as an analytical tool, and you
should not consider them in isolation or as substitutes for
analysis of the Company’s financial results as reported under IFRS.
Some of these limitations are: (a) although depreciation and
amortization are non-cash charges, the assets being depreciated and
amortized may have to be replaced in the future, and Adjusted
EBITDA does not reflect cash capital expenditure requirements for
such replacements or for new capital expenditure requirements; (b)
Adjusted EBITDA does not reflect changes in, or cash requirements
for, the Company’s working capital needs; (c) Adjusted EBITDA does
not reflect the potentially dilutive impact of equity-based
compensation; (d) Adjusted EBITDA does not reflect tax payments
that may represent a reduction in cash available to the Company;
and (e) other companies, including companies in the Company’s
industry, may calculate Adjusted EBITDA or similarly titled
measures differently, which reduces their usefulness as a
comparative measure. In addition, the annualized Adjusted
EBITDA return on equity ratio does not take into account effects of
seasonality from quarter to quarter. Because of these and
other limitations, you should consider Adjusted EBITDA and
annualized Adjusted EBITDA return on equity alongside the Company’s
IFRS-based financial performance measures, such as profit (loss)
for the period and the Company’s other IFRS financial results.
The following table presents a reconciliation of Adjusted EBITDA
to profit (loss) for the period, the most directly comparable IFRS
measure, for each of the periods indicated:
|
Three months ended September 30, |
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
US$ in Thousands |
(Loss) profit for the
period |
14,224 |
|
(5,582 |
) |
Adjustments: |
|
|
Income tax expense |
(619 |
) |
1,886 |
|
Depreciation of
property, plant and equipment |
4,491 |
|
2,576 |
|
Share-based payment
charged into profit or loss |
198 |
|
35 |
|
Interest expenses |
2,398 |
|
1,067 |
|
Impairment loss on IPP
solar parks |
23 |
|
732 |
|
Fair value changes of
financial liabilities-FVTPL |
918 |
|
3,055 |
|
Gain from hedge
ineffectiveness on cash flow hedges |
(273 |
) |
- |
|
Adjusted EBITDA |
21,360 |
|
3,769 |
|
The following table presents a reconciliation of annualized
Adjusted EBITDA return on equity to annualized profit (loss) return
on equity for the period, the most directly comparable IFRS
measure, for each of the periods indicated. Annualized profit
(loss) return on equity is profit (loss) return of the applicable
quarter multiplied by four, and divided by total equity as of the
applicable quarter end.
|
Three months ended September 30, |
|
2016 |
2015 |
|
|
|
US$ in Thousands |
Annualized net (loss)
profit return on equity |
36.5 |
% |
-17.9 |
% |
Adjustments: |
|
|
Income tax expense |
-1.6 |
% |
6.0 |
% |
Depreciation of
property, plant and equipment |
11.8 |
% |
8.2 |
% |
Share-based payment
charged into profit or loss |
0.5 |
% |
0.1 |
% |
Interest expenses |
6.3 |
% |
3.4 |
% |
Impairment loss on IPP
solar parks |
0.1 |
% |
2.3 |
% |
Fair value changes of
financial liabilities-FVTPL |
2.4 |
% |
9.8 |
% |
Gain from hedge
ineffectiveness on cash flow hedges |
-0.7 |
% |
- |
|
Annualized Adjusted
EBITDA return on equity |
56.2 |
% |
12.1 |
% |
The Company believes that Adjusted EBITDA and annualized
Adjusted EBITDA return on equity ratio are important measures for
evaluating the results of its IPP business.
These measures are not intended to represent or substitute
numbers as measured under IFRS. The submission of non-IFRS numbers
is voluntary and should be reviewed together with IFRS results.
Project Capacities
Unless specifically indicated or the context otherwise requires,
megawatt capacity values in this earnings release refer to the
attributable capacity of a solar park. We calculate the
attributable capacity of a solar park by multiplying the percentage
of our equity ownership in the solar park by the total capacity of
the solar park.
1 Adjusted EBITDA and annualized Adjusted EBITDA return on
equity are non-IFRS measures used by the Company to better
understand its results. Adjusted EBITDA represents profit or
loss for the period before taxes, depreciation and amortization,
adjusted to eliminate the impacts of share-based compensation
expenses, interest expenses, impairment charges, fair value changes
of financial liabilities, loss from hedge ineffectiveness on cash
flow hedges and reversal of tax provision. Annualized Adjusted
EBITDA return on equity ratio is Adjusted EBITDA of the applicable
quarter multiplied by four, and divided by total equity as of the
applicable quarter end. The Company urges you to study the
reconciliations between IFRS net income and Adjusted EBITDA, and
between annualized profit (loss) return on equity and annualized
Adjusted EBITDA return on equity provided in this release.
About Sky Solar Holdings, Ltd.
Sky Solar is a global independent power producer (“IPP”) that
develops, owns and operates solar parks and generates revenue
primarily by selling electricity. Since its inception, Sky Solar
has focused on the downstream solar market and has developed
projects in Asia, South America, Europe, North America and Africa.
The Company's broad geographic reach and established presence
across key solar markets are significant differentiators that
provide global opportunities and mitigate country-specific risks.
Sky Solar aims to establish operations in select geographies with
highly attractive solar radiation, regulatory environments, power
pricing, land availability, financial access and overall power
market trends. As a result of its focus on the downstream
photovoltaic segment, Sky Solar is technology agnostic and is able
to customize its solar parks based on local environmental and
regulatory requirements. As of September 30, 2016, the Company had
developed 301 solar parks with an aggregate capacity of 284.7 MW
and owned and operated 152.1 MW of solar parks.
Safe-Harbor Statement
This press release contains forward-looking statements. These
statements constitute “forward-looking” statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and 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” and similar statements.
Among other things, the quotations from management in this press
release and the Company's operations and business outlook contain
forward-looking statements. Such statements involve certain risks
and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. These
risks and uncertainties include, but are not limited to the
following: the reduction, modification or elimination of government
subsidies and economic incentives; global and local risks related
to economic, regulatory, social and political uncertainties;
resources we may need to familiarize ourselves with the regulatory
regimes, business practices, governmental requirements and industry
conditions as we enter into new markets; our ability to
successfully implement our on-going strategic review to unlock
shareholder value; global liquidity and the availability of
additional funding options; the delay between making significant
upfront investments in the Company's solar parks and receiving
revenue; expansion of the Company's business in US and into China;
risk associated with the Company's limited operating history,
especially with large-scale IPP solar parks; risk associated with
development or acquisition of additional attractive IPP solar parks
to grow the Company's project portfolio; and competition. Further
information regarding these and other risks is included in Sky
Solar's filings with the U.S. Securities and Exchange Commission,
including its annual report on Form 20-F. Except as required by
law, the Company does not undertake any obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
|
Sky Solar Holdings Ltd. |
Condensed Consolidated Statements of
Operations |
USD In Thousands, Except Per Share
Amounts |
(Unaudited) |
|
|
Three Months |
|
Nine Months |
Ended September 30 |
|
Ended September 30 |
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Revenue: |
|
|
|
|
|
|
|
Electricity generation income |
17,942 |
|
|
11,302 |
|
|
43,519 |
|
|
27,583 |
|
Solar
energy system and other sales |
5,419 |
|
|
775 |
|
|
8,572 |
|
|
7,370 |
|
Total
revenue |
23,361 |
|
|
12,077 |
|
|
52,091 |
|
|
34,953 |
|
Cost of
sales and services |
(10,139 |
) |
|
(3,618 |
) |
|
(21,946 |
) |
|
(10,961 |
) |
Gross
profit |
13,222 |
|
|
8,459 |
|
|
30,145 |
|
|
23,992 |
|
Impairment loss on IPP solar parks |
(23 |
) |
|
(732 |
) |
|
(23 |
) |
|
(774 |
) |
Selling
expenses |
(215 |
) |
|
(251 |
) |
|
(607 |
) |
|
(859 |
) |
Administrative expenses |
(8,472 |
) |
|
(6,072 |
) |
|
(19,665 |
) |
|
(15,440 |
) |
Other
operating income |
880 |
|
|
38 |
|
|
2,922 |
|
|
155 |
|
Gain on
disposal of interest in subsidiaries |
9,773 |
|
|
— |
|
|
9,773 |
|
|
— |
|
Reversal
of tax provision |
— |
|
|
— |
|
|
— |
|
|
6,025 |
|
Profit
from operations |
15,165 |
|
|
1,442 |
|
|
22,545 |
|
|
13,099 |
|
Investment gains |
338 |
|
|
2 |
|
|
396 |
|
|
149 |
|
Finance
costs |
(2,398 |
) |
|
(1,067 |
) |
|
(5,251 |
) |
|
(2,737 |
) |
Other
non-operating income (expenses) |
500 |
|
|
(4,073 |
) |
|
(3,302 |
) |
|
(5,465 |
) |
Profit
before taxation |
13,605 |
|
|
(3,696 |
) |
|
14,388 |
|
|
5,046 |
|
Income
tax expense |
619 |
|
|
(1,886 |
) |
|
(2,366 |
) |
|
789 |
|
Profit
(loss) for the period |
14,224 |
|
|
(5,582 |
) |
|
12,022 |
|
|
5,835 |
|
Other comprehensive income (loss) that may be subsequently
reclassified to profit or loss: |
- |
|
|
|
|
- |
|
|
|
Exchange
differences on translation of financial statements of foreign
operations |
4,538 |
|
|
3,907 |
|
|
11,268 |
|
|
(6,928 |
) |
Total comprehensive income (loss) for the
period |
18,762 |
|
|
(1,675 |
) |
|
23,290 |
|
|
(1,093 |
) |
Profit
(loss) for the period attributable to owners of the Company |
14,081 |
|
|
(5,582 |
) |
|
11,855 |
|
|
5,835 |
|
Gains for
the period attributable to non-controlling interests |
143 |
|
|
— |
|
|
167 |
|
|
— |
|
|
14,224 |
|
|
(5,582 |
) |
|
12,022 |
|
|
5,835 |
|
Total
comprehensive income (loss) attributable to: |
|
|
|
|
- |
|
|
|
Owners of
the Company |
18,974 |
|
|
(1,706 |
) |
|
23,148 |
|
|
(1,124 |
) |
Non-controlling interests |
(212 |
) |
|
30 |
|
|
142 |
|
|
30 |
|
|
18,762 |
|
|
(1,676 |
) |
|
23,290 |
|
|
(1,094 |
) |
Earning
(loss) per share — Basic |
0.03 |
|
|
(0.01 |
) |
|
0.03 |
|
|
0.02 |
|
Earning
(loss) per share — Diluted |
0.04 |
|
|
(0.01 |
) |
|
0.03 |
|
|
0.02 |
|
Earning
(loss) per ADS — Basic |
0.28 |
|
|
(0.12 |
) |
|
0.25 |
|
|
0.12 |
|
Earning
(loss) per ADS — Diluted |
0.28 |
|
|
(0.11 |
) |
|
0.25 |
|
|
0.12 |
|
|
|
Sky Solar Holdings Ltd. |
|
Condensed Consolidated Balance
Sheets |
|
USD In Thousands, Except Per Share
Amounts |
|
(Unaudited) |
|
|
|
|
September 30,
2016 |
|
December
31, 2015 |
|
|
|
Thousand |
|
Thousand |
|
Current
assets: |
|
|
|
|
Bank
balances and cash |
26,479 |
|
26,272 |
|
|
Restricted cash |
55,653 |
|
5,560 |
|
|
Amounts
due from related parties |
13,281 |
|
14,794 |
|
|
Trade and
other receivables |
43,618 |
|
31,052 |
|
|
Inventories |
2,690 |
|
3,294 |
|
|
|
141,721 |
|
80,972 |
|
|
Non-current assets: |
|
|
|
|
IPP solar
parks |
359,796 |
|
259,423 |
|
|
Amounts
due from related parties |
3,723 |
|
2,984 |
|
|
Other
non-current assets |
28,541 |
|
17,701 |
|
|
|
392,060 |
|
280,108 |
|
|
Total
assets |
533,781 |
|
361,080 |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
Trade and
other payables |
57,796 |
|
47,912 |
|
|
Amount
due to related parties |
7,829 |
|
7,606 |
|
|
Tax
payable |
8,709 |
|
2,197 |
|
|
Borrowings |
24,862 |
|
16,495 |
|
|
|
99,196 |
|
74,210 |
|
|
Non-current liabilities: |
|
|
|
|
Borrowings |
137,441 |
|
84,671 |
|
|
Other
non-current liabilities |
145,225 |
|
89,480 |
|
|
|
282,666 |
|
174,151 |
|
|
Total
liabilities |
381,862 |
|
248,361 |
|
|
Total
assets less total liabilities |
151,919 |
|
112,719 |
|
|
Equity: |
|
|
|
|
Share
capital |
5 |
|
5 |
|
|
Reserves |
146,811 |
|
112,846 |
|
|
Equity
attributable to owners of the Company |
146,816 |
|
112,851 |
|
|
Non-controlling interests |
5,103 |
|
(132 |
) |
|
Total
equity |
151,919 |
|
112,719 |
|
|
Total
liabilities and equity |
533,781 |
|
361,080 |
|
|
|
|
|
|
For investor and media inquiries, please contact:
Company:
IR@skysolarholding.com
Investor Relations:
ICR, LLC
Vera Tang
(646) 277-1215
Vera.tang@icrinc.com
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From Sep 2023 to Sep 2024