The majority of the impairment hit NT$ 1,030 million (US$33.5 million) relates to TS Solar in Malaysia, which had previously acquired production equipment from NSP but had stopped payment instalments ahead of schedule at the end of 2016. Image: NSP
Updated: Taiwan-based merchant cell and module producer Neo Solar Power (NSP) said it would incur impairment charges of around NT$ 1,330 million (US$43.2 million), due to manufacturing plant relocation and a loss from previously sold equipment to TS Solar.
Around NT$ 300 million in impairment charges would be related to scrapped production equipment & other facilities related equipment, due to shifting production from its Wujiang, China fab to Nan Chang, China.
However, the majority of the impairment hit NT$ 1,030 million (US$33.5 million) relates to TS Solar in Malaysia, which had previously acquired production equipment from NSP but had stopped payment instalments ahead of schedule at the end of 2016.
NSP said that TS Solar had stopped production due to market conditions. NSP said it would retrieve the manufacturing equipment according to the purchase contract with TS Solar that would be recognized as an impairment loss but not as a cash cost to the company.
January 2017 financial results
NSP also recently reported January 2017 sales, which declined over 34% from the previous month. Sales reached NT$ 766 million (US$24.9 million), down from December, 2016 sales of NT$1,166 million (US$36.5 million).
The company noted that the sales decline was partially due to Chinese New Year holidays (fewer working days) and decreased solar module shipments.
NSP said that the current market demand had been stable, with an expected mild cyclical rebound to occur in the first quarter of 2017. The company is planning to IPO its IPP business unit to ramp downstream PV power plant development, which would become an in-house source of demand for NSP’s modules.