Hanwha Q CELLS posts 60% increase in solar module shipments in 2015

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Hanwha Q CELLS noted that it remained on track to complete previously planned manufacturing capacity expansions by mid-2016.

‘Silicon Module Super League’ (SMSL) member Hanwha Q CELLS reported mixed fourth-quarter 2015 financial results but achieved total PV module shipments of 3,306MW, an increase of 60% from 2,065MW (1,098MW excluding Q Cells) in 2014.

With full-year shipments within previous guidance of 3.2-3.4GW, Hanwha Q CELLS confirmed its position as the fifth largest PV module manufacturer in 2015 and fifth-ranked SMSL.

Hanwha Q CELLS missed expected revenue recognition on PV module shipments in the fourth quarter of 2015, due to timing issues that related to around 248MW of modules still in shipment to customers, including US-based NextEra, with which the company signed a 1.5GW supply contract in 2016. 

Total module shipments in the quarter were 1,238MW, which included 990MW recognised in revenue, 911MW from external shipments and 78MW used in its own downstream PV project business. A total of 1MW of shipments were attributed OEM business in the quarter. 

The US remained Hanwha Q CELLS most important market in the fourth quarter, accounting for 35.8% of recognised revenue, followed by Japan (22.1%), EMEA (14.3%) and China (11.7%). 'Rest of world' accounted for 16.2% of recognised revenue in the quarter.

As a result, fourth quarter revenue was lower than expected at US$700.8 million, compared with US$427.2 million in the third quarter.  Gross profit was US$123.7 million, compared with US$93 million in the third quarter, while gross margin was reported at 17.7%, compared with 21.8% in the third quarter. 

The company missed expected gross margin figures for the fourth quarter of 2015, noting in its earnings call that it was impacted by PV power plant project sales in the being lower than expected in the quarter as well as incurring additional manufacturing ramp-up costs.

Total module shipments in the quarter were 1,238MW, which included 990MW recognised in revenue, 911MW was external shipments and 78MW used in its own downstream PV project business. A total of 1MW of shipments was attributed OEM business in the quarter.

2016 financial results

Hanwha Q CELLS posted full-year revenue of US$1,799.5 million, compared to US$779.6 million in 2014. The large difference was due to Hanwha SolarOne and Hanwha Q CELLS not being merged by the parent company at that time and Q CELLS not being a public company.

Gross profit was US$323.5 million, with a gross margin rate of 18%, compared to a gross margin in 2014 of 8.5% .The company said that the gross margin improvement was largely driven by cost structure improvements from continued high utilisation, a higher level of automation and higher purchasing power with a larger scale post-merger that had reduced operating cost by around US$100 million in the year. 

Hanwha Q CELLS reported an operating profit of US$76.6 million for the full year.

Seong-woo Nam, chairman and CEO of Hanwha Q CELLS said: “We are pleased to report a successful, transitional financial and operational results for full year 2015 highlighted by a return to net profitability and record high total module shipments as we celebrate the first full year since the merger between former Hanwha SolarOne and Hanwha Q Cells Investment.”

“Our achievement in manufacturing cost reduction was remarkable in 2015 as we are now in a leading position among Asian tier-1 peer group,” Nam added. “Our globally diversified cell and module production sites in South Korea, Malaysia and China will continue to help us to serve different global markets highly cost-competitively and immune from US and EU import duties.”

Manufacturing update

Hanwha Q CELLS noted that it remained on track to complete previously planned manufacturing capacity expansions by mid-2016. 

At the end of 2015, the company had in-house annualised production capacities of 1,400MW for ingot, 900MW for wafer, 4,300MW for cell and 4,300 MW for PV modules. 

Nameplate cell and module capacity is expected to reach 5,200MW by mid-2016, which includes an additional 800MW of cell production operated by Hanwha Q CELLS Korea, an affiliate of Hanwha Q CELLS. 

The company said that it expected capital expenditures of approximately US$180 million in 2016, which included US$100 million for capacity expansions and US$80 million for manufacturing technology upgrades and certain unspecified R&D related expenditures.

“Our achievement in manufacturing cost reduction was remarkable in 2015 as we are now in a leading position among Asian tier-1 peer group,” Nam added. “Our globally diversified cell and module production sites in South Korea, Malaysia and China will continue to help us to serve different global markets highly cost-competitively and immune from US and EU import duties.”

An 'all-in processing' cost of US$0.38/W was achieved at the end of 2015, compared to US$0.46.4/W in the first quarter of 2015. 

Solar cell utilisation rates topped 97% in the fourth quarter of 2015, while module utilisation rates fell to 93%, compared to 96% in the prior quarter.

All-in Processing cost of US$0.38/W was achieved at the end of 2015, compared to US$0.46.4/W in the first quarter of 2015.

Guidance

Hanwha Q CELLS noted that it expected first-quarter 2016 shipments to be in the range of 850-900MW with gross margins in the range of 18% to 19%.

The company also guided full-year PV module shipments to be in the range of 4.5GW to 4.7GW.  

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