‘Silicon Module Super League’ (SMSL) member Hanwha Q CELLS has reported a 54.4% year-on-year increase in net revenues in its Q1 results for 2016, compared to Q1 last year.
Hanwha’s module shipments were 912MW in Q1, slightly exceeding the guidance range of 850MW to 900MW.
Total net revenues were US$519 million, up 54.4% year-on-year, compared to $333.5 million in Q1 2015. However, revenues were down 26.7% from $702.1 million in Q4 last year. These were predominantly driven by module sales which accounted for $501.6 million, with $13.3 million revenue coming from downstream activities.
Gross profit was reported at $109 million in the first quarter of 2016, down from $134.2 million in Q4 last year, but up year-on-year from $48.4 million in Q1 2015. Meanwhile, an increase in gross margin to 21.2% compared with 19.1% in Q4 last year was attributed mainly to continued reduction in module manufacturing cost and increased production scale.
Total operating expenses were posted at $52.3 million, down 35% from $80.4 million in Q4 2015 and down 20.3% from $65.6 million in the first quarter last year. Research and development (R&D) expenses were $11.6 million in the first quarter, down 16.6% from the fourth quarter of 2015, but up 17.2% from Q1 last year.
Hanwha explained its decision to dispose its ownership of the Eumsong module fab in Korea to affiliate company Hanwha Q CELLS Korea Corporation. A transaction is expected to close in the second quarter of this year.
Seong-woo Nam, chairman and chief executive of Hanwha Q CELLS said the disposal was part of an asset-light strategy to avoid “having such resources locked up with fixed assets”.
The firm’s annual production capacities stood at 1.4GW for ingots, 900MW for wafers, 4.85GW for cells and 4.8GW for modules, as of 31 March 2016.
Hanwha is in the process of expanding its cell and module nameplate capacities to 5.2GW each, with expectations to reach these goals by the middle of 2016.
Looking at the next quarter, Hanwha forecasts module shipments of 1,100MW to 1,150MW, with gross margins of 19% to 20%. For full year 2016, the firm expects module shipements of 4.8GW to 5GW, up roughly 300MW from previous guidance.
Hanwha also expects capital expenditures of around $180 million in Q2 this year, for which $100 million will go to capacity expansion and $80 million will be allocated to manufacturing technology upgrades and R&D.
Nam added: “With a successful turnaround year behind us, we started 2016 with the right strategic elements in place to meet growing demands for our products and to further strengthen our technology and quality leadership.
“The rollout of Q.ANTUM product lines from our fabs in South Korea and Malaysia will help us increase our market share in key strategic markets with high power class products.”
“Despite recent market concerns over 2H outlook, our outlook for the remainder of 2016 is robust based on our sales backlog.”