Yingli records significant Q2 net loss; lowers FY shipment guidance


While Yingli posted relatively positive Q1 2012 financial results, the Chinese photovoltaic module manufacturer saw its situation worsen as the year progressed into Q2. Continuing falling module prices were said to be a main reason for the declines.

Specifically, having improved its net loss from RMB 3.8 billion in Q4 2011, to RMB 283.2 million in Q1 2012, it saw earnings spiral downward to hit RMB -608 million (US$-95.7 million) in Q2 2012. This compares to a net income of RMB 392 million in Q2 2011.

Meanwhile, Q2 2012 loss per ordinary share and per American depositary share (ADS) was RMB 3.66 ($0.58), compared to RMB 1.82 in Q1 2012, and diluted earnings per ordinary share and ADS of RMB 2.34 in Q2 2011.

Net revenues for the quarter also declined, from RMB 3.15 billion in Q1 2012, and RMB 4.4 billion in Q2 2011, to RMB 3.1 billion ($488.5 million). "The contribution to total net revenues from increased shipment in this quarter was offset by an industry-wide decline in the average selling prices of PV modules," said Yingli in a statement released.

Of this, photovoltaic module sales were said to have reached RMB 3 billion ($477 million) in Q2 2012, compared to RMB 3.1 billion in Q1 2012, and RMB 4.3 billion in Q1 2012. Despite the decrease in sales, module shipments were said to have sequentially increased by 13.7%. The company declined to provide any concrete figures, however. Photovoltaic system sales have continued to grow, on the other hand, to reap RMB 13 million ($2 million) in Q2 2012, compared to RMB 10 million in Q1 2012 and RMB 5 million in Q2 2011.

Liansheng Miao, chairman and CEO said Europe continued to represent Yingli’s largest market, although "solid" growth was seen in the U.S., and demand in China picked up. "We expect to see a significant increase of demand in China in the second half of this year, especially from September to November," he added.

Q2 2012 operating expenses also took a negative trajectory, rising to RMB 468.2 million ($73.7 million), from RMB 380 million in Q1 2012 and RMB 443.7 million in Q2 2011. "The increase in operating expenses from the previous quarter was mainly due to the increased selling expenses attributable to the growth in PV module shipment and an increase in overseas freight expenses per unit," said Yingli.

This saw Q2 2012 operating loss fall significantly to RMB 326.7 million ($51.4 million), compared to a loss of RMB 134.7 million in Q1 2012, and an income of RMB 526.4 million in Q2 2011, and an operating margin of negative 10.5%, compared to negative 4.3% and 12%, respectively.

Gross profit also tumbled in Q2 2012 to hit RMB 141.5 million ($22.3 million), compared to RMB 245.2 million in Q1 2012, and RMB 970.1 million in Q2 2011, and gross margin fell from 7.8% in Q1 2012 and 22.1% in Q2 2011, to 4.6%.

Due to the weak conditions, Yingli has lowered its full year photovoltaic module shipment guidance from between 2.4 and 2.5 GW, to 2.1 to 2.2 GW, thus representing an annual increase of 30.9 to 37.2%, as opposed to an increase of over 50%.

"We are confident to bring non-polysilicon cost down to below US$0.50 per watt by the end of this year," said Miao, adding, "In addition to the challenges from feed-in-tariff adjustments, excessive module supply and the ongoing anti-dumping and countervailing investigations in the U.S., the anticipated anti-dumping investigation in the EU has brought more pressure and uncertainties to the solar industry."