JA Solar Holdings announced its unaudited financial results for its first quarter ended March 31, 2015. Net revenue was RMB 2.4 billion ($387.7 million), an increase of 5.6% y/y and a decrease of 32.8% sequentially.
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Year over year growth was driven by strong demand in the Japanese and European markets.
Gross profit of RMB 386.7 million ($62.4 million) increased 1.6% y/y and decreased 30.2% sequentially. Gross margin was 16.1%, which compares to 16.7% in the year-ago quarter, and 15.5% in the fourth quarter of 2014. The sequential gross margin increase was driven by reduced raw material costs and high exposure to Japan where pricing was higher.
Total operating expenses of RMB 237.1 million ($38.2 million) were 9.9% of revenue. As a percentage of revenue, operating expenses were 9.7% in the first quarter of 2014 and 9.3% in the fourth quarter of 2014.
Operating profit was RMB 149.6 million ($24.1 million), compared to RMB 160.9 million ($26.0 million) in the year-ago quarter, and RMB 222.4 million ($35.9 million) in the fourth quarter of 2014. Operating margin was 6.2%, compared to 7.1% in the prior year period and 6.2% in the previous quarter.
Interest expense was RMB 66.6 million ($10.7 million), compared to RMB 56.8 million ($9.2 million) in the year-ago quarter, and RMB 61.5 million ($9.9 million) in the fourth quarter of 2014.
The change in fair value of warrant derivatives was a charge of RMB 13.9 million ($2.2 million), compared to a charge of RMB 33.6 million ($5.4 million) in the first quarter of 2014, and a gain of RMB 48.7 million ($7.9 million) in fourth quarter of 2014.
The warrants were issued on August 16, 2013 in conjunction with the Company's $96 million registered direct offering. The increase in fair value of the warrants, which was a non-cash loss, was mainly due to the increase in the Company's stock price during the quarter.
Earnings per diluted ADS were RMB 0.59 ($0.10), compared to earnings per diluted ADS of RMB 1.41 ($0.23) in the year-ago quarter, and earnings per diluted ADS of RMB 2.55 ($0.41) in the fourth quarter of 2014.
Operating cash flow was negative RMB 237.1 million ($38.2 million). ■