LDK Solar Q4 net loss tops $0.5 billion

In the past week alone, LDK Solar has announced the sale of one of its cell and module manufacturing subsidiaries to China’s Hefei government, and the default of a $23 million convertible bond payment. Bloomberg reports that LDK Solar’s net debt is sitting at around $3.1 billion, and that it is facing another loan repayment of $240 million in June.

In addition to the numerous financial troubles experienced last year, LDK Solar’s future is not looking so sunny. This is reflected in its Q4 2012 financial results, which were released today, April 18.

Overall, the company recorded a massive net loss of $514.7 million, up significantly from the $95.9 million loss seen in Q3. On a positive note, the figure was slightly up from the $588.7 million net loss achieved in Q4 2011. On the back of this, Q4 net loss per American depository Share (ADS) hit $3.68, down from $1.08 in Q3, but again slightly up from the $4.63 seen in Q4 2011.

Q4 2012 net sales also tumbled both sequentially, from $291.5 million in Q3, to just $135.9 million in Q4, and annually, from $420.2 million.

Q4 gross loss meanwhile, totaled $82.2 million, compared with $32.5 million in Q3, and $275.2 million in Q4 2011. This resulted in a gross margin of -60.5%, compared to -11.2% in Q3, and -65.5% in Q4 2011.

Operations also took a huge hit, with a Q4 loss of $408.7 million, compared to $75.7 million in Q3. Again, the figure was slightly up on Q4 2011, which recorded an operational loss of $531.4 million. This led to a very negative operating margin of 300.8%, significantly down on the -26% seen in the previous quarter and -126.5% in Q4 2011.

The last quarter of 2012 saw LDK Solar ship 184.7 MW of wafers, down from 230.2 MW in Q3; and 69.1 MW of photovoltaic cells and modules, compared to 161.9 MW in Q3. Looking ahead to Q1 2013, the company forecasts wafer shipments between 260 and 270 MW, and cell and module shipments between 30 and 40 MW. Meanwhile, it predicts Q1 revenues to be in the range of $80 million to $100 million.

In light of the grave financial situation of the Chinese manufacturer, it is currently focusing in emerging markets such as China, Africa, India and the U.S. “We believe these markets represent the strongest growth potential. We will also continue to focus on improving our cost structure by further driving down production costs and tightly managing our operating expenses," commented Xingxue Tong, president and CEO.

Edited by Becky Beetz.