Hanwha also posts significant financial losses

22. November 2011 | Industry & Suppliers, Markets & Trends | By:  Becky Stuart

Another victim of the depressed market conditions, Hanwha SolarOne has seen third quarter (Q3) 2011 losses, leading to full year module shipment guidance reductions. Like many, the company believes the financial woes will continue into the first half of 2012.

Hanwha SolarOne photovoltaic modules in a warehouse

Hanwha saw falling photovoltaic module shipments in Q3 2011. Image: Hanwha SolarOne.

The Chinese photovoltaic product manufacturer saw Q3 2011 net revenues falling sequentially by 20.1 percent and annually by 34.4 percent, to hit RMB1,437.3 million (US$225.4 million). The figures were said to be affected both by falling average selling prices (APS’s) and lower module shipments.

Speaking of which, Q3 2011 photovoltaic module shipments, including module processing services, were 200.9 megawatts (MW). This is a decrease of 2.5 percent from the 205.9 MW shipped in Q2 2011, and a 10.3 percent drop from the 223.9 MW shipped in Q3 2010. In terms of APS’s, excluding module processing services, they decreased to RMB7.86 per watt (US$1.23), from RMB10.09 per watt in Q2 2011.

The company adds that production cost, including both silicon and non-silicon costs, using internal wafers was US$1.13 per watt, thus representing a 14.4 percent decrease from US$1.32 per watt in Q2 2011. The average cost of polysilicon used in production was said to have significantly decreased to US$56.5/kg in Q3 2011, down from US$74/kg in Q2 2011. Hanwha says it expects the price of polysilicon to further decline in Q4 2011.

Hanwha’s estimated annual production capacities by the end of 2011 are expected to be 800 MW in ingots and wafers; 1.3 gigawatts (GW) cells; and 1.5 GW modules. 

The company also recorded a gross loss of RMB155.2 million (US$24.3 million), compared to a gross profit of RMB162.9 million seen in Q2 2011, and RMB526.7 million in Q3 2010. Gross margin was additionally negative at 10.8 percent, compared to a positive 9.1 percent in Q2 2011, and 24 percent in Q3 2010.

Furthermore, an operating loss was recorded in Q3 2011, amounting to RMB327.8 million (US$51.4 million). This is compared to the operating loss of RMB25.7 million seen in Q2 2011, and the operating profit of RMB398.7 million achieved in Q3 2010.

Like Suntech, the company’s largest solar market was Germany, having accounted for 45 percent of its Q3 2011 net revenues, despite the fact shipments fell below prior guidance. Meanwhile, the U.S. represented its second biggest market, followed by Belgium and the Netherlands. China, India, Korea and Australia were also said to be noteworthy markets in Q3 2011.

Looking ahead, Hanwha has reduced its module shipment guidance from one GW, to between 815 and 835 MW. Meanwhile, capital expenditures are expected to be approximately US$400 million.

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