Diversified renewable energy firm Shunfeng International Clean Energy (SFCE) said it would continue to report a net loss for 2017, due to product ASP declines and PV power plant grid curtailments in China.
SFCE had previously reported of around US$50 million in the first half of 2017, due to a catalogue of issues that had plagued the company since 2016.
However, SFCE said that the 2017 losses would be in the region of RMB 830 million (US$130 million), down from around US$370 million in 2016.
The company highlighted two key reasons for profit warning. Firstly, product (wafers, cells and modules) ASP was said to have declined by 17% in 2017, impacting gross margins. SFCE said that gross margins are expected to have declined to 9% in 2017, down from 12% in 2016.
Secondly, SFCE said that it was still impacted from PV power plant grid curtailments in some of the regions in China that it owns and operates plants. Grid curtailment issues in Xinjiang, Gansu, Qinghai and Ningxia were said to have slightly eased during the year but restrictions, notably in Xinjiang and Gansu regions remained an issue, impacting revenue generation.
SFCE noted that due to the restriction in electricity generation in Xinjiang and Gansu the estimated loss to be around 467,000,000kWh and approximately RMB 370 million (US$58 million) in revenue.