Yingli Green Energy’s third quarter (Q3) financial results have confirmed a slump in revenues, profit and margin, delivering a net loss of RMB 335.4 million ($50.3 million).
Revenue for Q3 reached just $218.9 million, some way below Q2’s $379.8 million, which was driven by relatively high shipments (662 MW for Q2). For Q3, shipments were just 365.3 MW as China’s second half, post-FIT cut slowdown took hold. In Q3 2015, shipments were 460 MW.
China accounted for 56.4% of Yingli’s module shipments for the quarter, and while demand in Japan remained stable at around 30.2% of shipments, this could not mask the domestic shortfall.
Gross profit fell to $12 million, down from $69.2 million in Q2, with gross margin contracting even further, coming in at just 5.5.% (from Q2’s 18.2%). These decreases are largely due to the increase in unit manufacturing costs at Yingli’s production facilities, where utilization rates have slumped in the wake of falling demand. Average selling prices also hit record lows in Q3, causing a drag on revenue.
Yingli’s operating expenses rose slightly on Q2, reaching $46.1 million and delivering an operating margin of negative 15.5%. While this is below Q2’s 6.3% operating margin, it is a rosier picture than a year ago, when Q3 2015’s operating margin was a debilitating negative 128.2%.
"The company has maintained its commitments to R&D, and through technological upgrade the efficiency of our patented PANDA n-type monocrystalline solar cells, which could generate electricity on both sides, increased to approximately 21% in Q3," said Yingli CEO and chairman Liansheng Miao. "We expect to increase the efficiency of p-type polycrystalline solar cells to approximately 19% early next year. We will endeavor to further reduce our manufacturing cost and increase the competitiveness of our PV products through continued technological upgrades and the optimization of our production facilities."
The CEO added that Yingli will adjust its marketing strategy in China following weakened demand, focusing its efforts on pursuing orders that promise better and faster payment terms, and actively participating in the bidding of the Top Runner program.
Looking ahead, Yingli expects module shipments in the range of 600 MW to 670 MW for Q4, with full year guidance at 2.1 to 2.2 GW.