The Chinese photovoltaics manufacturer says it will gradually shift its strategic focus from the West to the East, in response to the pull of emerging solar markets. Furthermore, it will increasingly focus on downstream projects. CEO, Stephen Cai acknowledged that oversupply is still a "significant problem", but is confident that global demand will increase.
In terms of its Q1 2012 financials, China Sunergy did see some improvement. Despite this, it still has a long way to go before hitting black. First quarter sales were particularly hard hit, having fallen from US$110.8 million in Q4 2011, to $68.5 million. Of this, photovoltaic module sales amounted to $64.7 million.
Q1 2012 gross profit recorded some growth, having increased from $0.2 million in Q4 2011, to $0.7 million. Gross margin, meanwhile, was 1.1 percent. Again, Q1 2012 operating expenses saw improvement, having fallen to $18.7 million, compared to $39.1 million in Q4 2011.
Q1 2012 loss from operations was also relatively positive, having hit $-18 million, compared to $-38.9 million in Q4 2011, and EBIT grew from $-12.5 million, up from $-54.9 million in Q4 2011. On the same trajectory, Q1 2012 net loss was $9.6 million, compared to $49.6 million in Q4 2011, and net margin was negative 14 percent and, thus, "significantly better than the previous quarter".
Q1 2012 shipments fell to 79.9 megawatts (MW), of which modules accounted for 75.2 MW. Although the company hit the high end of its shipping guidance, the figure represented a decrease of 31.6 percent on Q4 2011. Overall, European markets comprised the greatest proportion of revenue, including Italy, Australia, Bulgaria and Germany. In the future, China Sunergy has said aims to expand market share in China, the U.S., Australia, India, Japan and Indonesia.
In terms of average selling prices (ASPs) for its modules, the company recorded $0.86 per Watt (/W) in Q1 2012 which, while two cents higher than predicted, nevertheless represented an 8.5 percent drop on Q4 2011, which saw $0.9/W. "The lower ASP was mainly due to the imbalance of supply and demand throughout the solar value chain and reflects the fast dropping prices of raw materials including polysilicon and wafers," it said in a statement released.
Looking at its other costs, China Sunergy said that Q1 2012 blended wafer costs were $0.31/W, down 18.4 percent on Q4 2011. "The prices of polysilicon and wafers are expected to continue to decline in 2012," it said, adding, "Conversion costs of cells and modules manufactured realized substantial decreases in the first quarter of 2012 to $0.19 and $0.25 per watt, respectively."
CEO Cai, commented, "China Sunergy's first quarter results were just as expected, and our gross margins are beginning to recover. New markets are emerging, and we are positioning the company for a gradual shift in demand from West to East.
"In 2012, we will aim to improve the bottom line by optimizing supply chain costs, reducing expenses, and pursuing further technological innovation, and we will expand our investment in downstream projects. We will strive to maintain our position in Western and Eastern Europe and expand our market share in high-potential markets."
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