Yingli expects 30 percent Q4 module decrease22. February 2012 | Industry & Suppliers, Markets & Trends | By: Becky Stuart
Having preannounced its fourth quarter (Q4) 2011 financial results, Yingli Green Energy Holding Company Limited has said it expects photovoltaic module shipments to sequentially decline by 30 percent. Meanwhile, its gross margin has taken a tumble.
The Chinese manufacturer has found that shipments of its photovoltaic modules have decreased close to 30 percent from Q3 to Q4. In contrast, when announcing its Q3 figures in November, Yingli had actually upped shipments by 21.9 percent. It declined to provide any concrete figures, in megawatt terms, however it did at the time revise its full year shipment guidance downwards, from between 1.7 to 1.75 gigawatts (GW), to between 1.58 and 1.63 GW. This is still expected to be achieved.
Analysts at Jefferies comment that Yingli's Q4 2011 shipments declined 30 percent due to "revenue recognition conservatism". "We believe the conservatism can lead to strong 1Q  shipment growth," they stated.
In terms of Q4 gross margin, Yingli believes three percent will be seen, instead of 10. This includes a non-cash inventory provision. "Excluding the non-cash inventory provision, the company estimates that its gross margin of PV module for the fourth quarter of 2011 would be approximately 12 percent," it added in a statement released.
Yingli went on to say that due to the "challenging solar market conditions and the significant reduction of the company’s market capitalization since the second quarter of 2011", it expects to record damages worth around US$361 million for "long-lived assets" from its in-house polysilicon production subsidiary, Fine Silicon Co. Ltd. Sharply declining polysilicon market prices were cited as the main cause.
An impairment of goodwill worth approximately $43 million for Q4 and full year 2011 is also expected to be incurred.
Furthermore, the manufacturer says that it is likely to provide a provision of approximately $135 million on its inventory purchase commitment under long-term polysilicon supply contracts. "The management continues to negotiate with its suppliers to amend the prices under these long-term contracts. Should the contract prices be revised down in the future, the provision will be reversed to the extent of the amount recovered," concluded the statement.
Yingli will release its full year and Q4 financial results on February 29.
Choose between a digital and print subscription from pv magazine publisher Solarpraxis AG’s online shop!
- 2924 views
- 2910 views
- 2805 views
- 2518 views
- 2471 views
Opinion & analysis
Why do so many believe MENA is the next big solar market?, asks Yassir Gamil, managing director of Solarpraxis' new MENA office
Want to publish your press releases for free? Simply log in or register, enter the information you want to appear and we'll publish it for you!