After weeks of delay, Yingli Solar released its annual report for 2014 on Friday. The report details more losses at the vertically integrated Chinese solar company, as well as a warning to investors about its ability to continue operating.
"Facts and circumstances including recurring losses, negative working capital, net cash outflows, and uncertainties on the repayment of the debts raise substantial doubt about our ability to continue as a going concern," reads the report.
The company said that its declining financial health may make it difficult to fund future operations.
"If we become unable to continue as a going concern, we may have to liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our audited consolidated financial statements. Our lack of cash resources and our potential inability to continue as a going concern may materially and adversely affect the price of our ADSs and our ability to raise new capital or continue our operations."
The language echoes similar warnings from two other failed solar companies: Suntech and Solyndra.
Yingli Solar was once the biggest solar manufacturer in the world in terms of shipments, but dropped to second place behind Trina in 2014.
Yingli racked up $209 million in losses last year -- marking the third unprofitable year in a row for the company. Leading competitors Trina and Canadian Solar are posting profits.
The company has kept pace with industry-leading cost reductions, however. In 2014, Yingli was able to reduce costs by 8 percent and produce modules for an all-in cost of 48 cents. That's on par with Jinko, Trina and Canadian Solar, which are all producing modules well below 50 cents per watt.
"In 2014, Yingli was able to reduce internal costs, increase gross margins, diversify its regional portfolio, grow its downstream business, and remain one of the top suppliers in terms of shipments. Looking at these achievements, the company was comparable to top Chinese manufacturers in 2014. Though comparable in strategy, the company's bad debt is a weakness and one that has been raising questions for some time," said Jade Jones, a solar analyst with GTM Research.
Other analysts have called Yingli's fundamentals "pathetic." With more than $2 billion in debt, mostly from Chinese banks, the company is expressing worries about its ability to pay down its loans and access more capital, as well as its exposure to interest-rate variability compared to competitors.
Yingli says it is "exploring a variety of alternative financing plans" that include selling additional shares to major shareholders or borrowing money from existing shareholders.
The company also hopes that its downstream solar development business can help improve its financial health. Yingli reports that it has 1.6 gigawatts of projects in the pipeline for China, and an additional 300 megawatts of projects outside China.
"We are considering various strategies in such downstream businesses including selling self-developed solar projects to third parties upon completion, retaining and operating self-developed solar projects, forming joint ventures with third parties to develop and operate solar projects, and providing engineering, procurement and construction, or EPC services, to third parties," reads the annual report.
(Hat tip to PV Tech for breaking the news.)