Hanwha SolarOne shipments higher but margins falling: weak Q2

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

First quarter revenue and shipments at Hanwha SolarOne increased sequentially, adding to a growing theme that low-cost PV manufacturers can still find customers, despite weak demand. Total net revenues were US$335.2 million, an increase of 3.9% from 4Q10 and an increase of 48.7% from 1Q10. PV module shipments, including module processing services, reached 248.5 MW, an increase of 13.6% from 218.8 MW in 4Q10 and an increase of 65.0% from 1Q10. However, ASP declines and slightly higher material costs resulted in gross margins falling to 16.3% down from 20.3% in 4Q10.

Interestingly, Hanwha SolarOne noted that revenue from Germany actually increased 39% in the quarter, compared to a 25% increase seen in the previous quarter. However, the PV module manufacturer couldn’t buck the trend in Italy in the quarter – reporting revenue decreased from 19% in 4Q10 to 11% in 1Q11.

Opening-up and developing further markets outside of Europe were also key to revenue generation in the quarter, according to the company. Hanwha SolarOne noted that 9% of sales came from inside China, while the US accounted for 10% of shipments.

Australia remained a relatively strong market for in the quarter, rising to 10% of shipments in 1Q11. Other notable markets were the Netherlands, a port of destination for deliveries to countries throughout Europe, which accounted for 10% of shipments in 1Q11, according to the company.

“During a period of demand uncertainty resulting from regulatory changes in large markets such as Germany and Italy, we are quite pleased that we were able to record good shipment growth during the quarter,” noted Dr. Peter Xie, President and CEO of Hanwha SolarOne. “Although the demand environment for the second quarter of 2011 remains fluid, we are confident that there will be a rebound in the second half of 2011. This, combined with our new lower-cost manufacturing capacity coming on stream, should enable us to achieve improved operating performance as the year progresses.”

Hanwha SolarOne reported ASPs, excluding module processing services of US$1.71/W, down from US$1.82 per watt in 4Q10.  The blended cost of goods sold (“COGS”) per watt, excluding module processing services, was US$1.43, representing a 1.4% increase from US$1.41 in 4Q10.

Hanwha SolarOne also saw production costs rise slightly due to an increase in the price of polysilicon and higher costs of using internal wafers in cell production. The cost of polysilicon used in production increased to US$73/kg in 1Q11 from US$67/kg in 4Q10. The Company noted that it expects the price of polysilicon would decline from 2Q11 onwards.

As a result of material cost increases, the production cost (including both silicon and non-silicon costs) using internal wafers was US$1.27 per watt, representing a 5.8% increase from US$1.20 per watt in 4Q10. 

The company reiterated production capacity expansion plans for 2011, which would start after the second quarter. Hanwha SolarOne expects module capacity to reach 1.5GW by year end, while cell production should reach 1.3GW. Both ingot and wafer production is targeted to reach 1GW each in 2011.

Cost reduction programs for the year will include and accelerated program to bring slurry recycling in-house and the use of auxiliary materials for wire saw operations. Further cost reduction are targeted towards lost cost module component sourcing as well as improved cell efficiencies and reduced silver paste usage.

However, shipment guidance for the second quarter was set at 200MW, of which about 20% will be for PV module processing services. This is significantly down on first quarter shipments of 248.5MW, indicating a significant inventory overhang in key markets.

1 December 2021
Join over 500 attendees at 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, VDE, First Solar, Longroad Energy, Powertis and DNV Energy Systems
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

PV Tech Premium
November 30, 2021
Array Technologies reveals to PV Tech Premium the core motivations behind its US$652m deal to acquire STI Norland, creating what it says is the world’s biggest tracker company, from stronger supply chains to an ability to target more international markets
November 30, 2021
Electrical equipment group Schneider Electric and energy major bp are collaborating to help high emission companies achieve their decarbonisation targets.
November 30, 2021
JinkoSolar has slashed its shipments guidance for the year, reducing its top end guidance by more than 5GW as it blamed ongoing logistics issues and port blockages.
November 30, 2021
Solar EPC company iSun is investing in US commercial PV project developer Encore Renewable Energy as part of efforts to accelerate its geographic expansion.
November 30, 2021
The CEO of Hevel Group, Igor Shakhray, will leave the company to become CEO of Unigreen Energy, a silicon wafer and cell manufacturer, which is owned by Hevel majority shareholder Ream Management LLC
November 30, 2021
South Korean LG Electronics has announced a series of new appointments as it aims to target greater growth and customer satisfaction moving into 2022, while also elevating certain critical departments to division level in order to supply them with greater resources

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