Search sponsor
Cost reductions better than solar module price declines, coupled with higher shipments enabled Hanwha SolarOne to produce better than expected second quarter financial results. However, the company still posted a net loss for the quarter of US$39.0 million. Total net revenues were US$168.7 million, an increase of 33.3% from the prior quarter. PV module shipments, including module processing services, were 230.7MW, an increase of 43.6% from 160.7MW in the first quarter of 2012.
Ki-Joon Hong, chairman and CEO of Hanwha SolarOne commented, "In spite of a difficult operating environment, we achieved some good progress during the second quarter. Our shipment volumes grew nicely quarter-to-quarter, our production costs continued to improve and now are in reach of our year-end target and we are increasingly seeing synergies with our parent company, particularly in downstream activities. We remain optimistic that our presence in large new growth markets such as China, Japan and the US, will provide incremental volume potential in the second half of 2012.”
Hanwha SolarOne said that the increase in module shipments in the second quarter was primarily due to increased demand from Germany ahead of the FiT cuts, though the company also shipped modules to over 25 countries in the quarter.
Germany accounted for 57% of total shipments, while the rest of Europe and Africa accounted for 76% of total shipments. Other significant markets in Europe included England, Italy and Spain, representing 5%, 4% and 4% of total shipments, respectively.
The Asia Pacific region was said to have accounted for 17% of total shipments, including Korea (3%), Australia (3%), Japan (2%) and China (2%). Shipments to North America, including the US, represented 7% of total shipments.
Average selling prices (excluding module processing services) decreased to US$0.77 per watt. Gross margin was 6.3%, compared with negative 9.4% in 1Q12, were said to be due to the decline in production costs outpacing the decline in ASP. This was also supported by higher production utilization rates, which were driven by higher shipment volumes. Gross margin for the quarter was 9.1%.
Hanwha SolarOne said that third quarter shipments would be flat with the second quarter, but also revised its full-year shipment guidance to between 900MW and 1,000MW, compared to 1,000MW previously guided.
The company noted that it expected capital expenditures to be around US$150 million in 2012, noting this depended on demand and other market conditions. Processing costs (excluding silicon costs) were guided in the range of US$0.50 per watt by the end of 2012.
“We remain optimistic that our presence in large new growth markets such as China, Japan and the US, will provide incremental volume potential in the second half of 2012. Challenging industry conditions remain: overcapacity, a spike in manufacturer's inventories, declining prices, and regulatory issues pertaining to duties in the US and possibly Europe,” added Hong in a statement.
