Hanwha Q Cells returned to profitability during 2015, reports strong results

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Hanwha Q Cells reported strong performance across the board today in the release of results the fourth quarter and full year 2015. This is the company’s first full year results since it merged its solar business under SolarOne with Q Cells, which it acquired in 2012.

Shipments rose 60% year-over-year, as compared against the pre-merger shipments of SolarOne and Q Cells, to 3.31 GW. Revenues came in at US$1.8 billion, and the company achieved $44 million in net income.

A main factor in the company’s success was high utilization rates. Hanwha Q Cells started the year with an 82% module utilization rate during the first quarter, which rose to 93-96% over the next three quarters. The company’s cell utilization rates were even higher, starting at 90% during Q1 and rising to 97% during the second half of the year.

Hanwha Q Cells reports that it brought all-in processing costs to below US$0.39 per watt in December for in-house production with a Chinese value chain, which it calls an “industry-leading cost structure”. With a Q4 average selling price of $0.57 per watt, the company has ample space in its gross margin.

This combination of high utilization rates and reduced costs is reflected in Hanwha Q Cells’ operating margin, which rose from -5.2% in the first quarter to 9.4% in Q3 and 7.5% in Q4. In addition to its low production costs Hanwha Q Cells says that the merger allowed it to eliminate $100 million annually in redundant operational costs.

Hanwha Q Cells also has production in South Korea and Malaysia, which allows it to ship duty-free modules to the U.S. and avoid the minimum price agreement in the EU. These two markets were the end-destinations for roughly half the company’s module shipments during the year.

Overall Hanwha Q Cells’ sales were highly diversified, with a strong presence in Japan and some sales into China, giving the company a presence in all of the largest global markets. Over the course of 2015, the company’s sales have shifted strongly, from a focus on EMEA as the core market to North America.

Hanwha is also developing projects and supplying its modules for this business, however it shipped only 177 MW of modules to internal projects during the year, which represents only 6% of total shipments.

Similar to other large Asian PV makers Hanwha Q Cells is undergoing substantial capacity expansions, and expects to increase its nameplate capacity for cells and modules from 4.3 GW to 5.2 GW by mid-2016. The company expressed confidence in maintaining very high capacity utilization rates, and expects module shipments of 4.5 to 4.7 GW next year.