Hanwha SolarOne experiences Q3 losses; lowers shipment guidance

Hanwha SolarOne suffered a hard quarter with losses seen across the board. Despite this, chairman and CEO, Ki-Joon Hong believes parent company Hanwha Chemicals is presenting a number of new opportunities in the form of downstream activities and its cooperation with Q.Cells, which was recently taken over by Hanwha. Markets including China, Japan and the U.S. are providing further encouragement, he said.

Overall, Hanwha SolarOne saw its Q3 net loss attributable to shareholders on a GAAP basis fall to RMB 322.1 million (US$51.3 million), compared to a loss of RMB 266.7 million in Q2 2012, and RMB 177.6 million in Q3 2011. Net revenues for the quarter also plummeted, down from RMB 1.07 billion in Q2 2012, and RMB 1.43 billion in Q3 2011, to hit RMB 966.1 million (US$153.7 million).

These figures were in spite of increased photovoltaic module shipments, including module processing services, up from 230.7 MW in Q2 2012, and 200.9 MW in Q3 2011, to 239.5 MW in Q3 2012.

Q3 operating loss increased to RMB 251.2 million (US$40 million), down significantly from an operating loss of RMB 82.8 million in Q2 and RMB 327.8 million in Q3 2011. Declines in average selling prices (ASPs) – RMB 4.22/W (US$0.67) in Q3, compared to RMB 4.85 in Q2, and RMB 7.86 in Q3 2011 – and increased operating expenses were cited as the reasons.

As such, Q3 operating margin was negative 26%, compared with negative 7.7% in Q2 2012 and negative 22.8% in Q3 2011. Gross margin was similarly affected, at negative 5.8%, compared with positive 6.3% in Q2 2012. However, it was an improvement on Q3 2011’s which recorded negative 10.8%.

Q3 gross loss also fell flat, down from a gross profit of RMB67.5 million in Q2 2012 and a gross loss of RMB155.2 million in Q3 2011, to RMB 56.1 million (US$8.9 million).

Looking ahead to the full year, Hanwha SolarOne has again lowered its shipment guidance, from 900 MW to 1 GW, to 825 to 850 MW. It has also reduced its capital expenditure expectations from US$150 million to $100 million.

As of September 30, 2012, its photovoltaic production capacity included 800 MW of ingots and wafers, 1.3 GW of cells and 1.5 GW of modules. "The Company currently has no near-term plan to add additional capacity. Management will review expansion needs in the future in line with changes in overall market demand," it added.