Neo Solar Power Q3 revenue contracts 33.85%, losses hit $84 million

Neo Solar Power (NSP), a Taiwan-based producer of solar cells, has reported further losses in the third quarter (Q3) of the year, with revenue contracting 33.85% on Q2, and the first three quarters combined delivering net losses of NT$2,707 ($84.4 million).

These straitened times for the Taiwanese cell specialist are a result of market module oversupply, with frozen demand serving to depress average selling prices (ASPs) for NSP’s solar cells, which in turn has increased manufacturing cost per unit.

For the third quarter ended on September 30 2016, NSP delivered revenue of NT$2,979 ($93 million) – a figure substantially down on Q2 – and saw its operating loss grow to NT$1,786 million ($56.6 million). Gross margin, meanwhile, slumped to -42.75%.

NSP managed to keep its operating expenses on the level at NT$472 million (matching Q2’s overheads) while the firm reached the end point of its plans to shift cell production to Malaysia before the end of the year. The company confirmed that order visibility has improved since October, and utilization rates at its domestic cell production lines are increasing.

The company also expects to complete and sell a range of solar system projects in the U.S. and Japan in the fourth quarter, which will improve revenue and profit as a whole for the end of the year.

By the end of Q3, NSP had achieved 2016 revenues of NT$13,387 million ($418 million), and had cash on hand amounting to NT$10,054 million ($314 million) and a relatively low debt-to-asset ratio of 46%.