GCL prepares the decks to announce thumping losses

Share

As explanations for an annual loss of RMB5.8 billion ($892 million) go, the one offered up by polysilicon maker GCL-Poly Energy Holdings today is unlikely to placate shareholders.

That eye-watering figure for 2020–based on unaudited figures–compares with a net profit of RMB110 million ($16.9 million) for 2019 but the comparison is deceptive, the GCL board explained, as the 2019 figures included a RMB4.4 billion uplift from the sale of a 31.5% stake in GCL New Energy Technologies Co Ltd.

Factor in the statement the latest heavy loss comes despite currency gains on dollar-denominated debts–thanks to the dollar's depreciation against the renminbi–and the picture painted is of a grim year indeed for GCL.

That is in large part down to hefty impairments at a GCL New Energy solar project business forced to sell off 2.7 GW of the 7.7 GW portfolio it held at the start of last year, to pay down debts–a sale process which failed to avoid the company suffering a recent cross default.

The scale of impairments at a project operation which expects to announce a net loss of at least RMB900 million ($138 million) in a fortnight's time includes no less than RMB500 million for lost income from electricity revenue and another, non-cash hit of at least RMB300 million associated with long awaited payments which are still outstanding. The development side of GCL posted a RMB605 million net profit in 2019.

On that last point, at least, GCL New Energy said: “The board is currently reviewing its options to recover these receivables and shall take all appropriate measures to protect the rights and interests of the company and the shareholders. The management of the company is still confident that the company can recover these receivables by taking the relevant appropriate actions in the foreseeable near future.”

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Popular content

U.S. startup offers meter socket adapter that simplifies solar, battery, EV charging connection
04 December 2024 ConnectDER has secured $35 million in Series D funding to support its meter socket adapter (MSA) business, which integrates solar, storage, EV chargin...