Yingli Q3 revenues slide further on low utilization

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The third quarter financial results of Chinese Tier-1 solar company Yingli Green Energy were in line with its preliminary forecast that suggested persistent low utilization rates at its main manufacturing facility have dragged down revenues and increased operating losses.

Bursting the positive trend of other module producers’ Q3 results, Yingli saw its revenues for the quarter come in at RMB 2,233.9 million ($351.5 million), which was significantly lower year-on-year (Q3 2014 revenue was $529.1 million) and sequentially down on Q2 ($424.5 million).

Utilization rates of just 70% dragged down revenues and shipments, and punctured gross profit, which reached just $56.2 million. In Q3 2014, gross profit was $110 million. However, this still represented an increase in margin and profit from Q2, which Yingli states was due to a decrease in depreciation costs as a result of "the recognition of long-lived assets impairment in the quarter", as well as a slight increase in the average selling price (ASP) of modules.

Operating expenses for the third quarter grew significantly to $506.7 million, an increase over Q2 triggered by the writing down of a $581.3 million non-cash impairment charge on those long-lived assets (but partially offset by a gain from the disposal of the land use rights held by Fine Silicon).

As a result, Yingli’s Q3 EBITDA was negative $407.8 million, and the company’s net loss was $503.5 million. As a percentage of net revenues, operating expenses were 144%, which is up from 12.9% in Q2 and 15% in Q3 2014.

Shipments for the quarter, excluding OEM production (modules used for Yingli’s own downstream projects) were 460.4 MW, some way below the 727.9 MW shipped in the second quarter and vastly reduced on last year, when Q3 almost saw 1 GW of modules shipped (903.4 MW).

On the downstream front, Yingli sold 115 MW of PV projects in China while building out a further 200 MW pipeline, and expanded efforts in Poland to 60 MW and grew by 20 MW in Turkey. Internationally, Yingli’s solar development portfolio is more than 200 MW.

"During the third quarter of 2015, the company has deployed more flexible strategies by prioritizing full-payment orders or orders with competitive profit margins," said CEO and chairman Liansheng Miao. In China, he revealed, Yingli has signed a total of 350 MW of supply agreements with full cash prepayment, while in Japan the company registered its seventh-straight quarter of delivering more than 120 MW of modules.

"In the U.S. the company is well positioned given competitive trading tariff rates applicable to its products and high brand recognition," Miao said.

Looking ahead to the fourth quarter and entire fiscal year, Yingli expects shipments in the range of 420 to 440 MW and 2.35 to 2.4 GW respectively.