Hanergy to cut 2,000 jobs under restructuring plan, posts 90% net loss

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Hanergy’s earnings for 1H 2015 were never going to be boring. The group, which has courted controversy since early this year, has seen media coverage go from bad to worse. Most recently, MSCI became the fourth major index compiler to remove Hong Kong-based Hanergy from its index.

Now, Hanergy has announced that following a catastrophic loss of HK 59 million (US$7.6 million), down over 90% from the HK 1.6 billion gain seen in 1H 2014, up to 2,000 jobs could be cut at its headquarters, business units and regional companies.

Under a restructuring plan, the group has said it will "considerably" adjust its strategy, and replace its "high end" equipment and product development group by five new business groups: mobile energy, flexible industrial applications, flexible consumer applications, distributed energy, and Silicon-Germanium products

"Under the new strategic arrangement, the Group will strengthen its business sense in operation and become more performance oriented, to further strengthen the performance management of the Company, and implement strict elimination mechanism in order to build an excellent team," it said in its 1H earnings.

Hanergy further hopes to enter the solar markets in Germany, Spain, Italy and France, following the sale of more than 800 residential thin film power systems in the U.K., the Netherlands and Switzerland in this first year half. Apparently, 222.9 MW of its PV modules were also shipped in 1H 2015.

Going back to its 1H earnings, revenues of HK 2.1 billion were reaped, down from HK 3.2 billion, including HK 112 million in PV panel sales, HK 63 million in rooftop power station sales and HK 8.3 million in PV application product sales. Gross profit also tumbled from HK 2.7 billion to HK 1.5 billion.

Government grants, meanwhile, totaled HK 19.4 million in 1H 2015, down from HK 38 million in 1H 2014, bank interest income increased from HK 2 million to HK 23.4 million, and finance costs – interest – totaled HK 54 million.

Unsurprisingly, Hanergy's outlook is not hopeful for the rest of the year. "Due to the reasons including the cancellation of connected transactions and that the trading halt in its share is still in progress, the Group’s existing business partners, having their confidence damaged, may suspend or terminate their cooperation with the Group and may have a negative effect to the profit and revenue of the Group for the second half of 2015," it wrote in its earnings release.

In its July edition, pv magazine looked at the story behind Hanergy's rise and sudden fall, which this May saw US$19 billion wiped from its market value.

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