Chinese solar manufacturer Hanwha Solar-One may still be turning a loss but with the Qidong-based company reporting its latest figures yesterday, the numbers are turning strongly in the right direction and the board is preparing to increase production capacity.
Although the forward-looking section of Hanwha’s figures stated ‘no specific decision has been reached’ on whether to raise cell manufacturing capacity from 1.3 GW to 1.5 GW and module production capability from 1.5 GW to 2 GW early this year, Hanwha CEO Ki-Joon Hong said, in the same update: "We plan to expand capacity to meet growing global demand."
The Hanwha boss also claimed the company would have turned a profit but for end-of-year, non-cash charges of RMB54.5 million (US$8.9 million) including RMB28.6 million for bad debts, RMB15.6 million for provisions for advance payments associated with long-term supply deals and RMB10.3 million for inventory write-downs from falling prices.
Those pesky charges, and the obligation to stick to generally accepted accounting principles (GAAP) meant Hanwha reported an operating loss of RMB23.7 million for October-to-December and a full year deficit of RMB406.7 million. When those negatives are compared to a RMB132.7 million loss for the previous quarter and RMB1.2 billion for 2012 the reasons for optimism are evident.
Revenues and shipments rising
Hanwha’s renevues rose 14% quarter-on-quarter to RMB1.3 billion and 28.5% year-on-year to RMB4.7 billion with shipments up 10% to 352.2 MW and 54.3% to 1.28 GW on quarterly and annual comparisons, respectively.
The company posted a gross profit of RMB183 million for the final quarter of 2013 and of RMB335 million compared to a 2012 loss of RMB325.5 million for the 12 months.
With Hanwha increasing shipments to China from 11% to 16% and shipping 44% of its sales 150 MW to Japan, the only fly in the ointment was a fourth-quarter fall in average module selling prices from RMB4.16/W in Q3 to RMB4.09/W, a figure still higher than the RMB3.75/W seen in the final three months of 2012.
Hong predicted further manufacturing cost reductions this year thanks to a wider automation of processes and a predicted fall in the operating metrics for ingots and wafers produced in-house as well as announcing an expectation of higher shipments in 2014 and the establishment of a downstream presence in China with the help of strategic partnerships in its domestic market.
The company is predicting a similar scale of shipments for January-to-March with a full year 2014 prediction of 1.5-1.6 GW shipped.