First Solar Q4 sales fall to US$660 million; four lines in Germany to be idled

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

Bad timing of revenue recognition for PV power plant projects and lower module sales impacted First Solar’s fourth-quarter results, while industry dynamics have forced the company to lower its 2012 revenue guidance, issued in December 2011. Net sales in Q4 were US$660 million – a decrease of US$345 million from the third quarter of 2011. Full-year revenue reached US$2.8 billion. Net sales guidance was reduced from US$3.7-US$4.0 billion to US$3.5-US$3.8 billion. Weak market demand will result in four manufacturing lines in Germany being idled for six months in 2012, or until demand improves when further action may be required, according to management. Net GAAP loss reported for Q4 was US$413 million. 

“First Solar's performance in the quarter was impacted by an aggressive competitive environment, an uncertain regulatory environment, warranty-related charges, and restructuring costs incurred to help position our business for the future,” said Mike Ahearn, chairman and interim CEO of First Solar. “Despite these headwinds, we continue to make strides reducing manufacturing costs, increasing module efficiency, and successfully building out our captive project pipeline. These improvements, combined with our recent restructuring and strategic repositioning, enhance our competitive position in a very challenging environment.”

First Solar noted that it was impacted by pre-tax charges of US$393 million in the fourth quarter that were associated with a non-cash goodwill impairment for its components business, US$164 million of which was related to warranty and costs in excess of normal warranty expense, due to the manufacturing problems it experienced last year. A further US$60 million was said to be related to restructuring activities, as announced in December 2011.

Production update

The decision to start on the construction of a planned manufacturing plant in Vietnam will also be postponed due to market conditions.

Management said its production utilization rate was 94% in Q4. However, market conditions forecast for this year will lead to an expected production level of 1.5-1.8GW in 2012.

Significant adjustments to expected module demand meant that overall utilization rates will drop to between 60-70% in 2012, management noted in the conference call.  However, production cost increases will be limited due to higher average module efficiencies, which are expected to be 12.7% in 2012 up 0.1% from previous guidance. Management also noted that line throughput would also be higher than previous guided, noting a line run-rate of 90MW compared to 80MW previously guided.  
 
First Solar said that it reduced average module manufacturing cost to US$0.73 per watt, down US$0.02 from the fourth quarter of 2010.
 
Project pipeline
 
First Solar said it had added approximately 650MW (AC) of new projects to its pipeline, bringing the total to 2.7GW. The company is targeting 1.2GW installed and management noted that over 95% of planned projects in 2012 were already under customer contracts. 
 
Module sales
 
However, one of the challenging areas impacting manufacturing plans was a decline in expected sales of modules in 2012. Management said that it expect module sales to be within a wide range of 300MW-500MW, compared to previous expectation ot sales in the range of 700MW in 2012. 
 

1 December 2021
Join this virtual conference on 1-2 December 2021 for expert presentations covering PV Module Technology, Supply & Site Optimisation for Utility-Scale. Delegates can access streamed presentations, session recordings and chat/messaging tools to connect with fellow delegates and speakers. Speakers include leading developers, manufacturers, testing and research institutes, including: NREL, Silicon Ranch, Sonnedix, Heliene, Powertis, LONGi Solar, JinkoSolar, PVEL, Risen Energy, Seraphim, STS, Trina Solar, Eternalsun Spire, QEERI, Fraunhofer, Estuary Capital Partners and VDE
2 December 2021
Intersolar is the world’s leading exhibition & conference series for the solar industry. As part of this event series, Intersolar India in Mumbai is India’s most pioneering exhibition and conference for India’s solar industry. It takes place annually and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. Since 2019, Intersolar India is held under the umbrella of The smarter E India – India’s innovation hub for the new energy world.
9 December 2021
The Smart Energy Council is hosting Australia’s second Virtual Smart Energy Conference and Exhibition on Thursday, 9 December 2021. This event will show that the industry powers on despite COVID-19 and we are standing together undeterred in spirit. Bringing our global community together using the latest technology.
13 January 2022
Intersolar North America and Energy Storage North America “Come Together” for the first time in Long Beach, CA—connecting installers, developers, utilities, technology providers, policy makers, and key stakeholders from around the world to advance the clean energy future. With best-in-class conference programming, integrated exhibits and pavilions, and the live Solar Games installer competition, #isnaesna21 will showcase the industry trends, innovative solutions, and emerging talent transforming the solar, energy storage, and e-mobility markets. Register today to redeem our exclusive offer for PV Tech readers—free expo hall or 20% off full conference pass.
1 February 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.
23 February 2022
Held annually since 2016, the Energy Storage Summit Europe is the place to be for senior stakeholders in the European storage industry. Designed to accelerate deployment of storage, we examine evolving chemistries, business models, project design, revenue stacks and use cases for storage. The 2022 edition will include exclusive content around longer duration solutions, energy strategies for wide-scale deployment of EVs and "EnTech", the event which sits at the intersection of digitisation, decentralisation and decarbonation of the power system. Come to meet TSOs, DSOs, Utilities, Developers, Investors and Lenders and leave with new contacts, partners and a wealth of information.

Read Next

November 29, 2021
UK developer Elgin Energy is targeting 5GW of solar-plus-storage across its core markets by 2025 after completing a £25 million (US$33.3 million) fundraising round
November 29, 2021
A round-up of the latest project news from across the world, including Masdar’s plans to develop solar in Armenia, TotalEnergies completing its largest project in France and Shikun & Binui expanding its US energy portfolio.
November 29, 2021
The economic viability of deploying thin-film floating solar systems at offshore locations is being explored by a new collaborative study in the Netherlands.
November 29, 2021
Mainstream Renewable Power has secured €90 million (US$101.6 million) in equity funding to support the build-out of a multi-gigawatt pipeline across Latin America, Africa and the Asia Pacific region
November 29, 2021
Austrian utility Verbund is acquiring a 147.6MWp PV project in southern Spain from renewables developer BayWa r.e. as part of the company’s planned solar expansion.
November 26, 2021
Renewables developer and asset owner Grasshopper Energy has signed an agreement that could support the development of up to 1GW of solar in Romania by 2030.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
December 1, 2021
Solar Media Events
February 1, 2022
London, UK
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal

Cyber Monday Flash Sale – 50% off our subscriptions

24 hours only