LDK revises down Q2 guidance19. August 2011 | Applications & Installations, Global PV markets, Markets & Trends | By: Jonathan Gifford
In more disappointing photovoltaic financials, Chinese manufacturer LDK Solar has revised down its second quarter (Q2) guidance for gross revenue by around $250 million, squeezing gross margins to only around two percent.
The revised figures forecast revenues in the range of USD$480 to $500 million, down from previous forecasts of $710 to $760 million, with wafer shipments worth 410 to 430 megawatts (MW), instead of the 500 and 550 MW previously announced. In-house cell production of 120 to 125 MW, as opposed to the 600 and 700 MW forecast also represents a vast reduction. In perhaps the most startling downward revision, module shipments are now thought to be worth 75 to 80 MW instead of the 200 to 220 MW previously forecast.
In light of falling module prices, inventory is expected to be written down, by some $55 to $60 million. With declining figures across the board, LDK Solar expects a profit margin of 1.5 percent to 2.5 percent, well below the 22 to 26 percent forecast. While this fall is dramatic, LDK Solar appears that it may avoid the descent into losses some European and North American manufacturers have experienced.
The forecasts for the full fiscal year 2011 have also been revised down. Gross revenue forecasts have fallen by $1 billion, to $2.5 to $2.7 billion. Falls from previous guidance across the supply chain from module shipments, polysilicon production and cell production are all forecast.
Despite the downward revisions however, LDK still forecasts a profit margin of 15 to 20 percent for 2011. The company will report financial results for Q2 on Monday 29.
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