With the release of its second-quarter 2011 results, China Sunergy revealed that lower quarterly shipments, but a somewhat higher gross margin, countered its most recent guidance for the quarter. Revenues for Q2 2011 reached US$144 million, a 22.4% increase over Q2 2010, but a 13.1% decrease from Q1 2011.
Revenue from module sales accounted for US$142.9 million and made up 99.2% of the company’s total revenue. China Sunergy advised that its lowered quarter-to-quarter revenue could be traced to declining ASPs, which came in at US$1.64 per watt, compared to US$1.74 in Q1, and lower quarterly shipments.
Shipments for Q2 were 89.3MW, including 87.4MW of solar modules, and represented an 8.9% downfall from Q1 2011. At the close of Q2 on June 30, the company noted that it had 11.2MW of shipments in transit with the sales recognized in July. China Sunergy points to its shipments in transit for hindering it to make the low end of its revised 100MW shipment guidance for the quarter.
Gross margin for Q2 2011 was finalized at 2.6% with an in-house gross margin for modules produced with China Sunergy’s in-house cells totaled at 6.1%. The results did represent a slight increase over the company’s revised 1MW guidance for the quarter, which the company credited to its late 11.2MW delivery. China Sunergy maintained that a higher proportion of higher-cost inventory in Q2, coupled with an increase in non-silicon costs and a faster than expected drop in solar module ASPs led to low gross margin levels.
Stephen Cai, CEO of China Sunergy, commented, “Our second quarter results, while disappointing, marked a turning point for China Sunergy, which expects a significant rebound in the second half of 2011. The focus of the company in the second quarter was on diversifying beyond Europe and into new geographic markets, especially the United States and India, but the results from this strategic expansion will not be reflected in our financial performance until the second half of this year. Likewise, our capacity expansion and technological improvements represent a deliberate attempt to plan ahead for future demand in emerging solar markets such as the US, India, and our home country of China. We are investing now in our long-term future.”
In regards to Q3 2011 guidance, China Sunergy expects shipments to fall between 140MW and 160MW. Additionally, its gross margin is anticipated to reach between 4% and 5%, with an in-house margin of 6% to 7%. Due to some unexpected results in Q2 2011, the company has revised its full-year guidance, leading it to anticipate solar module shipments for all of 2011 to range between 470MW and 500MW.