Hanwha Q Cells registers 70% Q1 profit increase

South Korean solar module manufacturer Hanwha Q Cells – newly formed earlier this year following a strategic merger of Q Cells and Hanwha SolarOne – has posted positive inaugural Q1 financial results this week.

The company increased its revenue for Q1 2015 by 54% year-over-year, reaching $333.5 million in the first three months of the year. This robust performance drove gross profit by 70% year-over-year, reach $48.4 million, reaching a gross margin of 14.5%.

However, Hanwha Q Cells incurred a one-time restructuring charge of $22.1 million. This, according to the company statement, means that the Q1 financials "do not fully represent the business after the acquisition".

Excluding the restructuring charge, Hanwha Q Cells generated a positive operating profit of $4.8 million, and a pretax income of $4 million.

Hanwha Q Cells CEO and chairman Seong-woo Nam said that the newly formed company had substantially higher revenues than predecessor entity Hanwha SolarOne of $334 million, and total shipments of 547.3 MW.

"We are in the early stages of reducing redundant costs and realizing our economies of scale in areas like supply chain management," Nam said. "Our improved brand and product features resulting from the merger allowed us to maintain a higher Average Selling Price (ASP) than would have been achieved by the former entity."

The European market accounted for one-third of Hanwha Q Cells’ shipments, with Japan at 25% and North America at around 20%, the CEO confirmed. The U.S. market – where the company can ship solar modules tariff-free – proved fruitful for Hanwha Q Cells, while China remains a region bursting with potential but approached with kid gloves by the company as it chooses to "approach selectively near-term as pricing and credit terms stabilize".

The CEO also spoke of Hanwha Q Cells’ manufacturing initiatives, which include an upgrade of its ingot and wafer plant in China and the conversion of the cell lines at its Malaysia factory to cater for the production of the company’s next-gen cell, Q.Antum.

"Our first new module line in Korea, with an annual capacity of 250 MW, is currently ramping up, and the second line of 250 MW capacity is scheduled to commence operations in September," Nam added.

The company is targeting annual shipments of between 3.2 and 3.4 GW, and is aiming for gross margins of around 16-18%.