LDK Solar lowers full-year revenue guidance again on further Q3 losses

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LDK Solar has once again lowered its full-year revenue guidance, despite exceeding Q3 2012 revenue forecast.

The company reported sales of US$291.5 million, up from US$235.4 in Q2 and net losses of US$136.9 million, down from US$254.3 million in the prior quarter.

However, LDK Solar guided full-year revenue to be in the range of US$950 million and US$1 billion, down from US$1.1 billion to US$1.5 billion in previous guidance given in the prior quarter.

Revenue guidance at the end of Q1 2012 was US$1.5 billion to US$2.0 billion. Yet the company had begun the year with a 2012 forecast of between US$2 billion and US$2.7 billion.

LDK Solar reported that gross margins had been impacted by an inventory write down (US$37.8 million) due to falling prices on polysilicon, wafers, cells and modules. Its gross margin was negative 11.2%, compared to negative 39.1% in Q2 2012.

Improvements in both net loss and negative gross margin could be primarily due to increased shipments and a halt to polysilicon production, which was operating at a loss in previous quarters. 


Shipments of wafers in Q3 2012 reached 230.2MW, down from 316.7MW in Q2. Solar cell and module shipments in Q3 were 161.9MW, up from 135.6MW in Q2 2012.

The company did not report polysilicon production levels in Q3, having reduced production to only 538 mega-tonnes in Q2 as it ramped down production to undertake process upgrades. This was to lower costs and reduce losses, due to having a production cost base higher than its major competitors and spot market prices.

Xingxue Tong, President and CEO of LDK Solar said in a statement: “We were pleased to deliver third quarter results that were in line with expectations. While we saw improvement to our top and bottom line in the third quarter, our results continue to reflect the industry-wide pricing pressure and demand weakness that is negatively impacting the entire solar supply chain.”

Q4 Guidance

LDK Solar said that it expected Q4 2012 revenue to be in the range of US$230 million to US$290 million flat to significantly down from Q3 2012 and representing and wide forecast margin, despite guidance given at the beginning of the last month of the year.

The company also guided Q4 wafer shipments to be in the range of 200MW – 250MW, a similar range to the previous quarter and cells and module shipments between 50MW – 80MW, significantly down from Q3 shipments levels of 161.9MW.

Full-year shipment guidance

For full-year 2012, LDK Solar said that it expected wafer shipments to be between 910MW and 960MW, down from Q2 2012 full-year guidance of between 0.9GW and 1.2GW.

The company also revised down full-year solar cell and module shipments to between 500MW and 530MW, down from 550-750MW.

PV Inverter shipments (Sunways acquisition) for the year were also lowered to between 150MW – 200MW, down from prior guidance of between 170MW and 210MW.

LDK Solar expects PV system project construction to be in the range of 200MW to 300MW and to recognise between 50MW and 100MW through project sales and EPC services for third party customers. However, the company had provided guidance in the previous quarter that it would recognise between 110MW and 150MW of projects for the full-year.

LDK Solar noted that at the end of Q3 2012 it had US$111.9 million in cash and cash equivalents and US$340.7 million in short-term pledged bank deposits.

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