Solargiga posts sharp net loss in 2018

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The diversified solar group’s PV module shipments rose slightly to about 2.7 GW in 2018, from roughly 2.4 GW a year earlier. External shipments accounted for about 1.46 GW, up 17% year on year. Total sales also jumped from CNY 2.8 billion in 2017 to CNY 3.07 billion in the 12 months to the end of December 2018.

“This highlights the group’s strategy of adding 1 GW per year (of) high-efficiency module capacity in the second half of the year, making the group’s total production capacity 2.2 GW,” Solargiga said in a statement to the Hong Kong stock exchange, describing this as “the right direction.”

However, due to the decline of sales prices following changes to the Chinese government’s solar policy, the group’s gross profit slid to CNY 397.5 million, as revenue edged up just 0.6% to CNY 4,022.452 million, according to a statement to the Hong Kong stock exchange. Its gross profit margin fell from 16.4% in 2017 to 9.9% for the 12 months to the end of December.

Solargiga’s annual PV module production capacity hit 2.2 GW in 2018. Annual production of monocrystalline solar cells at its core production hub in China’s Liaoning province hit 400 MW. It primarily supplies its PV cells to its own downstream business, with only a small portion of the group’s total output being sold to external customers in China and Japan. Its products range from monocrystalline and multicrystalline cells to N-type double-sided solar cells.

Revenue from its PV cell business also jumped from 2017 to CNY 85.1 million. The group’s PV project development business, meanwhile, brought in CNY 58.18 million of revenue, up sharply from the preceding 12-month period. Across all segments, most of the group’s total revenue came from its biggest market, China, at CNY 2.96 billion. Sales to Japan, its top foreign market, brought in CNY 662.96 million of revenue in 2018.

In 2018, Solargiga started operations at the first phase of its new 600 MW monocrystalline silicon solar ingot and wafer plant in Qujing, China’s Yunnan province. Revenue from the group’s ingot and wafer business fell to CNY 808.49 million in 2018. Annual production of monocrystalline silicon ingots and monocrystalline silicon wafers each stood at 1.8 GW in 2018. External shipments of monocrystalline silicon ingots hit 413.8 MW by volume in 2018, up 32% year on year. External shipments of monocrystalline silicon wafers reached at 850.3 MW, with customers including companies such as Taiwan’s Motech Industries and massive Chinese state-owned enterprises such as State Power Investment Corp. (SPI).

As of December 31, 2018, Solargiga’s liabilities exceeded its current assets by CNY 676.8 million. However, the group’s directors claim that there are adequate sources of liquidity on hand to fund its working capital and capital expenditure needs through the rest of this year, in addition to short-term debt obligations it needs to meet.

Last October, Solargiga reported that it revenue from its manufacturing business fell 12.6% in the first nine months of 2018 to CNY 2,444.4 million, from CNY 2,797.3 million for the same period a year earlier. The poor earnings followed a warning, issued in late August, that the company expected to post a loss for the period ending June 30, 2018.