Sunpower Group fiscal 2018 profit doubles to $64.7m

SINGAPORE - Sunpower Group's fiscal 2018 net profit more than doubled to 320.5 million yuan ($64.7 million) from 145.8 million yuan a year-ago.

This was due to its expansion into the green investments (GI) business, underpinned by "stronger-than-expected" ramp-up in utilisation by GI plants, and the acquisition of Yongxing Plant, the environmental protection solutions specialist company said on Wednesday (FEB 27).

Earnings per share (EPS) rose to 41.87 fen from 19.76 fen a year prior. It is proposing a first and final dividend of 0.19 cent, up from 0.12 cent the year before. The date of payout will be announced later, the group said.

Shares for Sunpower closed at $0.60 apiece as at 11.57am on Thursday.

Revenue for the full year ended Dec 31 rose 66 per cent to 3.26 billion yuan from 1.97 billion yuan a year-ago, on the back of increased revenues from its manufacturing and services, and GI segments. Its manufacturing and services segment garnered revenue of 2.53 billion yuan, while GI was at 736.8 million yuan.

Meanwhile, net asset value per share stood at 207.70 fen, up from 169.86 fen a year ago.

For the fourth quarter ended Dec 31, 2018, underlying net profit increased by 2.4 times to 138.5 million yuan from 57.7 million yuan a year ago. "Underlying net profit" refers to the group's "true operating performance", after adjusting net profit attributable to shareholders including effects of convertible bonds (CB) for amortised interest expenses and fair value gains or losses associated with the CBs issued in 2017, as well as foreign exchange gains or losses.

Thus, underlying EPS was at 18.1 fen, up from 7.8 fen a year ago.

In terms of outlook, barring unforeseen circumstances, Sunpower said it is "well placed" to further improve earnings growth and quality in its next phase, when it will ramp up GI operations further and look to secure more earnings accretive projects.

It will continue to ramp-up existing GI projects, driven by a continuous securing of new customers following the mandatory closure of small "dirty" boilers and relocation into industrial parks, and the organic growth of existing factories in industrial parks served by the group's GI plants.

It also expects full-year contributions from acquired GI plants such as Yongxing Plant, electricity sales from Changrun Project and the start of sludge treatment by Changrun Project. In the second half of this year, its Lianshui Project is expected to reach full operations, while its Shantou Project will start trial production. It will also look at potential accretive merger and acquisitions (M&A) of GI plants that can contribute immediately to the top and bottom lines.

The group also said it has a strong order book of 2.5 billion yuan, with manufacturing and services to focus on higher quality orders to improve yield.

Guo Hong Xin, executive chairman of Sunpower said the group's target is to make GI its value creator and growth driver, such that it will eventually forms the bulk of the company's value.

"China is working hard to fix its air pollution problems and has expanded smog governance policies to the whole of China with the enactment of the new 2018-2020 Three-year Action Plan for Winning the Blue Sky War. We are well placed to tap into this expanded market opportunity right away and orientate the future direction of the company in a way that will create substantial value for our shareholders," Mr Guo added.