Yingli suffers Q1 revenue and shipment slump

Chinese vertically integrated solar company YIngli Green Energy has limped into 2017, posting weak revenue and shipment figures for the first quarter (Q1).

Module shipments for the first three months of the year came in below guidance at 370.9 MW, which is in stark contrast to the 635.1 MW shipped in Q4 2016, and was also significantly below the 508.1 MW of shipments in Q1 2016.

Yingli pins the blame on its contracted shipment figures on Japan’s market decrease, while shipments to the U.S. also tailed off sharply. Allied to lower average selling prices (ASPs), Yingli’s lower shipments dragged revenues down to just $179.9 million in Q1, which is some way below the $294 million posted in Q4 2016.

The Chinese giant managed to reduce its losses significantly in 2016, but the hangover from a rough couple of years is evidently still being felt into 2017. Gross profit, for instance, was only $8.9 million, which is a significant decline both sequentially and year-on-year. Yingli said that lower gross margin on the sales of PV cells weighed heavy on its profits and gross margin – a situation made acutely more severe by the loss of market share in the high price Japanese and American markets.

It was not all bleak for Yingli, however. The company was able to significantly decrease its operating expenses to just $24 million, representing just 13.3% of its net revenue. By contrast, in Q4 2016, operating expenses accounted for 95.3% of Yingli’s net revenue. The firm stressed that it had taken a stricter and more effective control on its general and administrative expenses, and also decreased its R&D activities.

Losses were also limited further, resulting in just a $15 million operating loss – again, quite a turnaround from the $270.5 million of losses posted in Q4 2016. This resulted in a negative operating margin of 8.4%, down from negative 88.3% in Q4 2016.

During the quarter, Yingli also paid down RMB 300 million in medium-term notes (MTN), meaning the company has now met all of its payment obligations under MTNs issued in 2012. There are, however, still a number of outstanding notes due under the firm’s subsidiary, Tianwei Yingli.

At the end of Q1, Yingli Green Energy’s cash reserves were $60.6 million, of which $54.4 million is restricted cash – a rather precarious position for a company of its size to be in. Looking ahead, Yingli is confident of an uptick in module shipments as China’s Q2 market demand increases. The company has published Q2 shipment guidance in the range of 950 MW to 1,050 MW.