In announcing Trinas 2011 financials, Jifan Gao, chairman and CEO for the Chinese photovoltaic module manufacturer acknowledged that while the market has been challenging recently, there is potential for long-term growth. For Trina, this means an in-house cell and module production capacity expansion of up to 500 megawatts (MW) in the first half of 2012, and cell efficiencies of 20 percent.
"With installed PV systems becoming increasingly affordable, we see evidence of increasing solar demand in markets less dependent upon government support or utility rate premiums," stated Gao. "We believe this positive trend represents a great opportunity for our company and the solar industry in the future."
The financials
Photovoltaic module shipments performed particularly well in the fourth quarter (Q4) of 2011, having reached around 425 MW up 14.8 percent on Q3 2011, and higher than its previous guidance of between 320 to 350 MW. Over the full year (FY) 2011, Trina shipped around 1.51 gigawatts (GW), which again beat the companys own guidance of 1.4 GW, and increased by 43.1 percent from FY 2010. Trina attributed the increase to the North American and Chinese solar markets, increased manufacturing capacity, and a spike in photovoltaic installation demand ahead of tariff changes in markets including Germany and Italy.
Meanwhile, net revenues declined by 9.6 percent in Q4 2011, from Q3 to hit US$435.7 million. Over 2011, net revenues worth $2.95 billion were recorded, thus representing a 12 percent decrease from 2010. The drop was attributed primarily to the falling average selling prices of photovoltaic modules.
Q4 gross profit also significantly dropped, by 40.4 percent, from Q3 2011, to reach $31 million. For the FY 2011, a gross profit of $332.6 million was recorded, which represented a massive decrease of 43.1 percent from 2010.
Furthermore, at 7.1 percent, Trinas Q4 gross margin missed its guidance of 10 percent and fell from Q3s 10.8 percent. FY gross margin fared just as badly, at 16.2 percent, compared to a respectable 31.5 percent in 2010.
Loss from operations in Q4 amounted to $62.9 million, compared to a loss of $23.5 million in Q3. This meant that for the FY 2011, a paltry operating income of $31 million was reaped, compared to the healthy $417.3 million seen in 2010.
Meanwhile, Q4 2011 operating margin was negative 14.4 percent, compared to negative 4.9 percent in Q3.
Finally, net loss in Q4 was $65.8 million, compared to a net loss of $31.5 million in Q3. As such, for the FY 2011, net loss amounted to $37.8 million a huge decrease of 112.1 percent from 2010.
2012 guidance
For Q1 2012, Trina expects to ship between 400 and 430 MW worth of photovoltaic modules. Meanwhile, it predicts that overall gross margin will be in the low teens in percentage terms, "taking into account wafer and cell requirements outsourced to third party suppliers to meet demand in excess of its internal capacity". For FY 2012, it forecasts module shipments of between two and 2.1 GW.
In terms of non-silicon manufacturing costs, by the end of the year, they are expected to be below $0.60 per watt. Trina says it also anticipates a sequential reduction in its silicon manufacturing costs in Q1.
Capacity ramp ups are also on the cards, as aforementioned, with Trina looking to increase its cell and module production capacity by up to 500 MW, to a total of approximately 2.4 GW by the end of the first half of 2012. In a statement, the company explained, "[Trina] successfully launched commercial production of its ‘Honey' technology-based module in January, 2012 and is currently ahead of schedule to meet its stated 500 MW target."
It adds that it is targeting a milestone cell efficiency of 20 percent by mid- 2012 and a cell efficiency of 21.5 percent in 2013, with the help of the Solar Energy Research Institute of Singapore (SERIS). "The company is developing monocrystalline N-type SPARC solar cell that involves printing contacts on the cell's back side to increase front surface exposure to sunlight, while also eliminating front shading losses," continued the statement.
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