GCL-Poly’s half-year profits plunge

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In a sign that upstream photovoltaic manufacturers are increasing sales volumes, but suffering under falling prices in 2012, GCL-Poly has posted a half-year loss of HK$330 million (US$42.55 million), which is down from a HK$3,550 million ($457 million) gross profit for the same period in 2011. Basic losses per share were approximately HK cents 2.13.

In delivering the weak results, GCL-Poly’s chairman Zhu Gong Shan chose to highlight the European debt crisis and subsidy policy changes on the continent as driving down market prices of photovoltaic products. On a positive note, Shan indicated that polysilicon and wafer processing costs were reduced by GCL-Poly by 15% and 41%, respectively, on 2011.

Looking forward, GCL-Poly’s management pointed to growth of photovoltaic markets in the U.S. and China as being positive signs. Chairman Shan predicted the U.S. market to grow to 10 GW or above by 2016. China’s installed capacity goals of 21 GW by 2015 and 50 GW by 2020 were also highlighted by the company in its earnings statement. Shan indicated that these goals represent a "minimum target", rather than a cap for installations in the country.

GCL-Poly’s figures for the first 6 months of 2012 reported that 9,012 MT of polysilicon was sold and 3.2 GW of wafers, over the period. These are increases of volume by 498% and 50%, respectively.

The company also reported "modest" progress in the development of its downstream business. In Q1 2012, GCL-Poly formed a joint venture with U.S. utility-scale project developer NRG Solar. It also developed and sold a 92 MW solar farm to Consolidated Edison Development, at a profit of $16 million. In China, GCL-Poly signed a letter of intent with China Merchants New Energy to develop projects worth 1 GW within 3 years.

In terms of the financing of its downstream business, GCL-Poly has also established cooperation agreements with international banks and financial institutions including Well Fargo, Bank of America Merrill Lynch, the Standard Chartered Bank and China Development Bank.