LDK posts significant net loss; lowers FY revenues

Referring to the continued solar industry challenges, Chairman and CEO, Xiaofeng Peng says LDK remains cautious for the third quarter of the year. "We continue to believe that some markets such as China will begin to see improved demand in the second half of this year and expect growth opportunities in this market to continue to expand over the next several years," he added.

Down from US$177.2 million in Q1 2012, LDK Solar posted a net loss of $254.3 million in Q2 2012, and a loss of $2.00 per diluted ADS, compared to a loss of $1.46 per diluted ADS in Q1 2012.

Q2 2012 sales, meanwhile, just achieved the lower end of the company’s guidance at $235.4 million, up slightly from $200.1 million in Q1 2012, but down on the $499.4 million seen in Q2 2011.

At $92 million, gross loss for the quarter improved from the $131 million lost in Q1, but was still significantly down on the gross profit of $11 million seen in Q2 2011. As such, Q2 2012 gross margin was negative 39.1%, compared to negative 65.5% in Q1 2012, and positive 2.20% in Q2 2011.

Loss from operations also continued to spiral, down from $135.8 million in Q1 2012 and $47.9 million in Q2 2011, to a loss of $172.7 million in Q2 2012. "As a part of our liquidity plan, LDK Solar entered into several sales agreements to sell some of its real estate properties and land use rights to local government authorities during the second quarter of 2012. As a result, $30.5 million of impairment loss for property, plant and equipment was recorded for the excess of book value to sales price," wrote LDK in a statement released.

As such, Q2 2012 operating margin fell to 73.4%, compared to negative 67.9% in Q1 2012, and negative 9.6% in Q2 2011.

Achieving the lower end of its guidance for wafers, Q2 2012 saw LDK ship 316.7 MW. However, at 135.6 MW, the Chinese photovoltaics manufacturer missed its cells and modules shipment guidance.

Looking ahead, LDK expects to record a revenue of $220 million to $260 million, and ship between 190 and 240 MW of wafers, and between 140 and 180 MW of cells and modules. For the FY, the company has lowered its revenue guidance from $1.5 billion to $2 billion, to $1.1 billion to $1.5 billion. It already reduced this at the end of Q1 2012, from $2 billion to $2.7 billion.

The statement continued, "For fiscal 2012, LDK Solar estimates … polysilicon shipments between 1,100 MT and 1,400 MT, wafer shipments between 0.9 gigawatts (GW) and 1.2 GW, cell and module shipments between 550 MW and 750 MW and inverter shipments between 170 MW to 210 MW. LDK Solar expects PV system project construction to be in the range of 200 MW to 300 MW and to recognize between 110 MW and 150 MW through project sales and EPC services for 3rd party customers."