Q3: Suntech posts 13 percent gross margin; announces redundancies09. November 2011 | Markets & Trends, Global PV markets | By: Jonathan Gifford
While acknowledging that cost reductions are key and capacity expansion plans are to be put on hold in the current environment, Chinese polysilicon module manufacturer, Suntech has announced a 13 percent gross margin for the third quarter (Q3) of 2011. It has also said that redundancies have been made.
These preliminary margin results are at the high end of the projected range and shipments were reported to have increased by over 15 percent, quarter-on-quarter. Q3 earnings, meanwhile, were reported as being over USD$800 million.
In a statement announcing the results, chairman and CEO, Zhengrong Shi commented that the environment is challenging and the focus was on becoming a "leaner", more competitive company. "By proactively implementing these initiatives, we are confident Suntech will be able to maintain its financial and operational stability, and emerge in an even stronger market position," he said.
Suntech also spelled out targets of reducing operating expenses by 20 percent, by 2012, and improving working capital by $200 million by the end of the year.
Shi added that all of these efforts will contribute to photovoltaics being more competitive in the market and playing a greater role in the global energy mix.
Due to efforts to reduce costs, Suntech has announced that it will report payments of USD$10 million in "severance expenses" to staff that have been made redundant. It also reported non-cash foreign exchange losses for Q3.
A spokesperson for the company could not elaborate on how many employees have been affected, or if any production facilities have closed down, however.
Suntech will announce its full Q3 financial results on November 22.
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