Hanergy Thin Film to shed 2,000 jobs as sales to parent drop 90%

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

PV thin film equipment and module producer Hanergy Thin Film Power Group (Hanergy TF) said in reporting first half 2015 financial results that it would be restructuring its operations with the loss of around 2,000 jobs, 37% of its workforce of 5,458 at the end of the reporting period. 

The restructuring is a result of its parent company, Hanergy Group cancelling orders for a-Si thin-film equipment and production facilities it would then operates on behalf of its parent, due to a halt in its stocks being traded on the Hong Kong exchange and subsequent enquiry into its business relationships with non-public parent. 

The job losses are expected across the company, including a multitude of subsidiaries, some which operate in PV downstream markets. It was not clear how many jobs would be lost in thin film module manufacturing or its equipment manufacturing operations. 

Hanergy TF also noted that sales generated from its recently established string of solar retail shops in several major cities in China as well at its online store had been “unsatisfactory”, without providing sales figures. However, the company noted that in an effort to preserve cash, “some of the stores may be closed in the future.”

Financial results 

With cancellation of major sales contracts with Hanergy Group, sales to parent company decline 90% and accounted for a fraction of sales in the first half of 2015. 

Total revenue was HK$2.1 billion (US$273.2 million), compared to (US$414.5 million) in the prior year period, a 34% decline.

However, the majority of sales (US$241 million) in the reporting period were attributed to Shandong Macrolink New Resources Technology one of its third party customers that signed a US$660 million a-Si manufacturing plant deal totalling 600MW in February 2015. 

Hanergy TF said that it had shipped equipment totalling 300MW to Shandong Macrolink in the reporting period, which is impressive if the equipment was not already assembled as typically critical processing thin film equipment lead times are between 6 to 9 months. 

However, according to a recent Reuters report, privately held Shandong Macrolink confirmed that it has since cancelled the order with Hanergy TF, due to uncertainties over its future. 

Hanergy TF did not make any reference to the cancelled order in its financial report. 

It also remains unclear whether Shandong Macrolink remains entitled to receive Hanergy TF shares then valued at around US$700 million after meeting 80% payment on the US$660 million contract.

Also yet to be revealed is the location of the Shandong Macrolink facility that Hanergy TF has shipped the 300MW turnkey production line. 

Other revenue remains limited

The majority of the remaining sales in the first half of the year were primarily attributed to PV module sales in the UK (US$5.49 million) and the US (US$0.96 million). Non- Shandong Macrolink sales in China totalled around US$23 million. 
The company said that it had sold over 800 sets of residential PV systems in the UK, Netherlands and Switzerland in the reporting period. 

Hanergy TF reported module sales of US$14.4 million and rooftop PV system sales of US$8.1 million for the reporting period. 

Module shipments to group affiliates totalled 222.9MW in the first half of the year, while orders outstanding from group affiliates totalled 502.1MW. The remaining modules were said to be shipped when required for downstream projects, without providing any timelines. 

It remains unclear what type of thin-film modules had been shipped to Hanergy affiliates as the majority of projects for rooftop systems, even in China that the parent company had publicised, rely on CIGS modules supplied by Solibro in Germany and the subsidiary had less than 200MW of annual nameplate capacity. 

Due to cancelled equipment orders from Hanergy Group and Shandong Macrolink as well as potentially holding PV modules for downstream projects, Hanergy TF reported that inventory stood at US$322.8 million at the end of the first half of 2015, up from US$85 million in the prior year period. 

However, payment for shipments by Hanergy affiliates in the reporting period had related to only 35.8MW, which 50% of the value had been paid, according to the company. 

Hanergy TF reported a net loss US$7.65 million in the first half of 2015, it first reported loss since being acquired by Hanergy Group. 

Vanishing manufacturing contracts and capacity expansions

According to PV Tech’s announced capacity expansion analysis, published in sister quarterly technical journal, Photovoltaics International, Hanergy TF had third party manufacturing contracts totalling 2,400MW. 

However, although Inner Mongolia Manshi Investment Group Company was said to have re-confirmed the signed contract for a 600MW a-Si thin-film manufacturing plant, Hanergy TF said that it had not received written confirmation from Baota Investment Holding Company regarding its 1,200MW contract totalling US$1.32 billion. 

The massive sell-off of Hanergy TF shares and the halting of trading that followed had been tied to rumours that Baota Investment had cancelled the deal. 

With Manshi Investment yet to make any financial transactions since signing the contract in late March, 2015 only 300MW of contracted capacity has actually been shipped, which if the Reuters story is true will mean 1,500MW from the total of third party contracts are effectively cancelled. 

Hanergy Group cancelled a-Si thin-film deal totalling 900MW for BIPV applications. 

However, the fate of a further 900MW of CIGS thin-film capacity Hanergy TF was planning remains unclear. 

Hanergy TF had previously announced plans to build turnkey production lines in China with a nameplate capacity of 300MW employing MiaSolé-based CIGS sputtering process technology and a second 300MW line using Solibro’s co-evaporating manufacturing process technology.

However, capital expenditure for the first six months of 2015 was only around US$29.2 million. 

A known equipment order for CIGS technology was placed with equipment supplier Singulus Technologies for around €20 million (US$22.3 million) with delivery later in 2015. The order was for its second generation TENUIS II platform used for buffer layer deposition.

To meet the previously announced 600MW CIGS plant plans for China, capital expenditure would need be in the range of several hundred million dollars for the reporting period, unless the plans had been scaled back significantly. 

The company also reported that a total of US$504.6 million was outstanding on the balance sheets for contract work related to contracts with Hanergy affiliates and Shandong Macrolink. 

Other receivables outstanding totalled around US$112 million, including Hanergy affiliates and third parties.

Hanergy TF had cash and cash equivalents of around US$307.8 million at the end of June, 2015. 

The obvious concern for the second half of the year is whether Hanergy TF can secure any third party contract revenue and payments from outstanding receivables from Hanergy Group and affiliates as well as third parties. 

Revenue from PV module sales have remained insignificant outside Hanergy Group and affiliates but without the partial payment by Shandong Macrolink, the company would have had revenue of only around US$32 million in the reporting period. 

In comparison, the leading thin-film producer, First Solar had first half 2015 revenue of US$1.36 billion. 

19 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?
26 August 2021
In this webinar, JA Solar will present its product portfolio based on the latest technologies to improve your PV projects, ensuring maximum reliability and performance. During the webinar we will receive insight from JA Solar about its solar technology roadmap and how the manufacturer is providing customers with innovative solutions to suit their needs, while we will also analyse how to determine the best product solution for each solar project.
6 September 2021
The 38th European Photovoltaic Solar Energy Conference and Exhibition will be held online from 6 - 10 September 2021, allowing PV experts from all around the globe to participate with just one click! The EU PVSEC is the world's leading forum for PV Research and Development and the biggest Conference on PV Solar Energy worldwide. That is why PV experts from all around the globe are keen on gathering together each year to be part of this specialist’s event, to present and discuss the latest developments in Photovoltaics, to network and to conduct business.

Read Next

July 29, 2021
Tracker and racking provider Arctech has delivered SkySmart II tracking system to a 575MW agriculture-sharing solar project located in Nangong City, Hebei Province, China.
July 29, 2021
Unigreen Energy, owned by Hevel majority shareholder Ream Management LLC, has broken ground on a wafer and cell manufacturing plant that will produce 1.3GW of silicon n-type monocrystalline ingots and wafers as well as 1GW of heterojunction technology (HJT) solar cells.
July 29, 2021
Meyer Burger has revealed plans to launch a solar roof tile product, expanding its rooftop solar product range.
July 29, 2021
US residential solar installer SunPower has partnered with EV charging provider Wallbox to add EV charging technologies to its portfolio.
July 29, 2021
US residential solar installer Sunnova said it was investing in its end-to-end solar services to cater for customers demanding more from their rooftop installations.
July 29, 2021
The US Senate has passed a new bipartisan infrastructure bill after weeks of protracted discussions, establishing US$550 billion in new infrastructure funding as part of an investment described as “once-in-a-generation”.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021
Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
BRISTOL, UK