LDK still suffering in Q1; lowers FY revenue guidance

26. June 2012 | Industry & Suppliers, Markets & Trends | By:  Becky Beetz

LDK Solar has seen some improvement on its fourth quarter 2011 (Q4) financial results, with Q1 achieving slight progress. However, with declining net sales and a stagnant gross margin, the Chinese photovoltaic manufacturer still has a long way to go before it is in the black. It has additionally adjusted its full year (FY) guidance.

LDK branding

LDK has lowered its FY 2012 revenue guidance.

In Q1 2012, LDK Solar recorded a gross loss of US$131 million. While better than the $275.2 million loss seen in Q4 2011, it is still a far cry from the profit of $241.6 million achieved in Q1 2011. Meanwhile, the company’s Q1 gross margin remained sequentially stagnant at 65 percent, compared to positive 31.5 percent in Q1 2011.

In terms of its operational results, LDK recorded a loss of $135.8 million, compared to a loss of $531.4 million in Q4 2011, and an income of $196.1 million in Q1 2011. Q1 2012 operating margin, on the other hand, was negative 67.9 percent, compared to negative 126.5 percent in Q4 2011, and positive 25.6 percent in Q1 2011.

In a statement released, the company said both gross margin and operational results were negatively affected by provisions for potential countervailing and anti-dumping duties, totaling $5.7 million, and an inventory write-down and a provision for firm purchase commitment worth $91.1 million.

Representing a sharp decrease, Q1 2012 net sales were just $200.1 million, down from the $420.2 million seen in Q4 2011, and the $766.3 million reaped in Q1 2011. The figure did, however, remain within the company’s previous guidance of sales between $190 million and $230 million.

Looking at its photovoltaic products, LDK shipped 164.4 MW worth of wafers in Q1 2012, compared to 197.1 MW in Q4 2011, and 153.9 MW worth of cells and modules, down from 255.5 MW. Meanwhile, it produced around 51.2 MW of cells and 1,900.8 MT of polysilicon in Q1 2012, compared to 149.6 MW and 2,317.8 MT, respectively, in Q4 2011.

Lower guidance

In Q2 2012, the company expects to achieve revenues of between $220 million and $270 million. In terms of its products, it forecasts wafer shipments of  between 300 and 350 MW, cells and module shipments of between 140 and 180 MW, in-house polysilicon production of between 520 and 570 MT, and in-house cell production of between 80 and 100 MW.

For FY 2012, LDK said it is targeting revenues of between $1.5 billion to $2 billion, instead of the previously announced $2 billion to $2.7 billion.

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