GCL-Poly warns of massive net loss for 2020

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
GCL-Poly Energy Holdings expects to report a net loss for 2020 of not less than RMB 5.8 billion (US$891 million). Image: GCL-Poly

Major polysilicon and wafer producer GCL-Poly Energy Holdings expects to report a net loss for 2020 not less than RMB5.8 billion (US$891 million).

The net loss warning is the largest GCL-Poly has announced, dwarfing losses made in 2013 and 2018.

GCL-Poly Group had reported a net loss in the first half of 2020 of RMB1,924 million (US$281.8 million), with its key Solar Material business unit (polysilicon and wafers) making losses of RMB2,023 million (US$296.2 million).

These first half year losses were attributed to a 51.1% decline in actual silicon rod production as the company disposed of a 31.5% equity interest in Xinjiang GCL polysilicon plant with a nameplate capacity of around 50,000MT in 2019. The Xinjiang plant also suffered a major incident while under annual maintenance during this period.

The company was also impacted by COVID-19 with weak demand in the first half of the year, resulting in rapidly falling polysilicon average selling prices (ASPs), which fell to US$7.56/kg in that reporting period, down from US$9.01/kg in the prior year period. Wafer ASPs followed a similar downward path.

Although GCL-Poly had noted the start of a rebound in polysilicon ASPs at the end of the first half 2020 reporting period, the company was bullish on the polysilicon business unit returning to profitability in the second half of the year.

Based on GCL-Poly’s profit warning, second half year net losses increased to not less than US$596 million, however the company did not provide insight into a profitable position for the Solar Material business unit as a whole.

The net loss warning is the largest GCL-Poly has announced, dwarfing losses made in 2013 and 2018.

The sale of the Xinjiang GCL polysilicon plant in 2019 boosted GCL-Poly’s balance sheet by RMB4.4 billion (USUS$676 million), resulting in a very small net profit for the year of around RMB110 million (US$17 million).

GCL-Poly said that its full-year 2020 expected net losses were partially attributable to the sale of Xinjiang GCL in 2019, due to the absence of the Xinjiang GCL disposal gain in its 2020 financial year.

The company also noted that the expected net losses were partially attributable to impairment provision on assets, while the expected increase in the net loss was partially offset by the exchange gain caused by the depreciation of the USD against the RMB for USD denominated indebtedness.

Read Next

September 22, 2021
More than 190 US solar companies have warned that proposed duties on imports of modules and cells from three Southeast Asian countries represent an “immediate and serious threat” to America’s solar sector.
September 22, 2021
China has appealed a recent World Trade Organization (WTO) ruling that rejected the country’s challenges to the US' safeguard tariffs on certain crystalline silicon PV cells.
September 16, 2021
As much as 191GW of new solar PV is expected to be installed this year – up by a third on last year’s deployment figure – despite polysilicon and module prices remaining high into 2022, BloombergNEF has said.
September 15, 2021
Solar module manufacturer Seraphim has started construction on new phases of its 10GW module manufacturing facility in Jinzhai, China.
September 15, 2021
Leading ‘Solar Module Super League’ manufacturer JinkoSolar has said it is addressing the reliability of shipments to the US market, while also upgrading its module capacity forecast for this year and teasing an expansion of n-type cell capacity.
PV Tech Premium
September 13, 2021
Following the release of the US Department’s Solar Futures Study, Liam Stoker assesses the downstream and upstream trends that must be realised for US solar to fulfil its potential.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 6, 2021
Solar Media Events, Upcoming Webinars
October 6, 2021
Solar Media Events
October 19, 2021
Solar Media Events
December 1, 2021