Sky Solar Holdings, Ltd. Reports Unaudited Financial Results for First Half of Fiscal Year 2019
First Half 2019 Highlights
- Revenue of
$25.9 million, compared to $33.2 millionin the first half of 2018
- Electricity revenue of
$24.3 million, compared to $31.9 millionin the first half of 2018
- Adjusted EBITDA of
$18.6 million, compared to $34.2 millionin the first half of 2018
- 117.1 MW of IPP assets in operation as of
June 30, 2019, compared to 211.0 MW as of December 31, 2018
- 16.9MW of projects under construction as of
June 30, 2019.
During the first half of 2019, the Company completed multiple strategic developments, including:
- Sold rights of a 24.5 MW project in
Japanfor $91.0 million, and
- 2.2 MW of projects connected in
|Major events occurred subsequent to the first half of 2019:|
|In October 2019, Sky Solar arranged to change its American Depositary Share (“ADS”) to its ordinary share (“Ordinary Share”) ratio from one (1) ADS representing eight (8) Ordinary Shares (the “ADS Ratio Change”) to one (1) ADS representing twenty (20) Ordinary Shares. The ADS Ratio Change became effective on November 8, 2019 (the “Effective Date”).|
|In November 2019, Sky Solar and its affiliates entered into a settlement agreement with Hudson and its affiliates in connection with the lawsuit filed by Hudson against the Company earlier this year in the Court. The settlement agreement resolved the disputes in connection with Hudson’s lawsuit and both parties also agreed to release each other from liabilities in connection with Hudson’s lawsuit.|
|As a result of the settlement agreement, on November 22, 2019, the Court ordered that Hudson’s motion for summary judgment is denied as moot in light of the stipulation of discontinuance without prejudice filed jointly by Hudson and Sky Solar on November 14, 2019.|
|As a part of the settlement agreement, the Company anticipates that it will be compensated by Hudson for, among other assets, the Former Uruguay Subsidiaries based on the mutually agreed valuation.|
|The settlement agreement remains subject to Hudson’s and the Company’s entering into further definitive documentation to close the transactions agreed to in the settlement agreement.|
First Half 2019 Financial Results
Electricity sales were
Systems and other sales were
The following table shows the Company’s sequential and period-over-period change in revenue for each category, geographic region and period indicated.
|First half 2019||Period-To-Period||First half 2018||Sequential||Second half 2018|
|(US$ in thousands, except percentages)|
Cost of sales and services was
Gross profit was
Selling, general and administrative expenses were
Other operating income was
Loss on disposal of interest in subsidiaries was
Impairment loss on IPP was
Operating profit was
Investment gain was
Financing costs were
Other non-operating income was
Income tax expense was
Net loss was
Basic and diluted loss per share was
Basic and diluted loss per ADS was
Adjusted EBITDA was
The Company had 16.9 MW of projects under construction as of
Balance Sheet and Liquidity
Use of Non-IFRS Measure
To provide investors with additional information regarding the Company’s financial results, the Company has disclosed Adjusted EBITDA, a non-IFRS financial measure, below. The Company presents this non-IFRS financial measure because it is used by the Company’s management to evaluate its operating performance. The Company also believes that this non-IFRS financial measure provides 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, fair value changes of financial assets, (gain) loss from hedge ineffectiveness on cash flow hedges and reversal of tax provision.
The use of Adjusted EBITDA 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. Because of these and other limitations, you should consider Adjusted EBITDA 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:
|Ended in June 30,|
|US$ in Thousand|
|Profit (loss) for the period||(13,858||)||8,155|
|Income tax expense||17,509||9,738|
|Depreciation of property, plant and equipment||7,369||9,391|
|Share-based payment charged into profit or loss||-||-|
|Fair value changes of financial liabilities-FVTPL||13||(1,372||)|
|Fair value changes of financial assets-FVTPL||(442||)||-|
|(Gain)Loss from hedge ineffectiveness on cash flow hedges||726||(273||)|
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.
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.
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, Europe, South America and North America. 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 June 30, 2019, the Company owned and operated 117.1 MW of solar parks.
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 the U.S. 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.
1 Specifically, Hudson designated one of its separate entities, Hudson Global Finance DE, LLC, to appropriate ECI’s shares.
2 These subsidiaries held six operating IPP solar parks with 71.7 MW of production capacity.
3 Adjusted EBITDA 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, fair value changes of financial liabilities, loss from hedge ineffectiveness on cash flow hedges.
For investor and media inquiries, please contact:
SKYS Investor Relations:
The Blueshirt Group
US or Mandarin
+1 (415) 489-2195
Gary Dvorchak, CFA
+86 (138) 1079-1480
Sky Solar Holdings Ltd.
Condensed Consolidated Statements of Operations
USD In Thousands, Except Per Share and ADS Amounts
|Ended June 30|
|Electricity generation income||24,321||31,482|
|Solar energy system and other sales||1,568||1,718|
|Cost of sales and services||(12,913||)||(14,969||)|
|Other operating income||45,333||18,380|
|Loss on disposal of interest in subsidiaries||(35,970||)||—|
|Provision on receivables and non-current assets||115||—|
|Impairment Loss on IPP||(36||)||—|
|(Loss) profit from operations||10,250||24,360|
|Investment (losses) gains||599||147|
|Other non-operating income (expenses)||150||1,913|
|(Loss) profit before taxation||3,651||17,893|
|Income tax expense||(17,509||)||(9,738||)|
|Profit (loss) for the period||(13,858||)||8,155|
|Other comprehensive income (loss) that may be subsequently reclassified to profit or loss:|
|Exchange differences on translation of financial statements of foreign operations||7,386||(2,167||)|
|Total comprehensive (loss) income for the period||(6,472||)||5,988|
|Profit (loss) for the period attributable to owners of the Company||(13,858||)||8,168|
|Gains (losses) for the period attributable to non-controlling interests||—||(13||)|
|Total comprehensive (loss) income attributable to:|
|Owners of the Company||(6,460||)||5,964|
|(Loss) earning per share — Basic||(0.033||)||0.019|
|(Loss) earning per share — Diluted||(0.033||)||0.019|
|(Loss) earning per ADS — Basic||(0.26||)||0.16|
|(Loss) earning per ADS — Diluted||(0.26||)||0.16|
Sky Solar Holdings Ltd.
Condensed Consolidated Balance Sheets
USD In Thousands
|June 30,||December 31,|
|Bank balances and cash||16,262||43,831|
|Amounts due from related parties||6||16,428|
|Trade and other receivables||54,010||20,535|
|IPP solar parks||244,951||353,050|
|Amounts due from related parties||4,690||5,050|
|Other non-current assets||78,462||52,397|
|June 30,||December 31,|
|Trade and other payables||53,333||31,972|
|Amount due to related parties||184||211|
|Other current liabilities||8,390||130,323|
|Other non-current liabilities||102,301||75,605|
|Total assets less total liabilities||66,738||78,207|
|Equity attributable to owners of the Company||66,725||73,186|
|Total liabilities and equity||427,089||585,217|
Source: Sky Solar Holdings Ltd