Slower demand from key European markets saw Suntech Power Holdings report preliminary Q3 2012 revenue of approximately US$387 million, down 18% from the prior quarter.
The key knock-on effect of weaker demand was the guidance that shipments would decline q-on-q in the low single digit percentage in Q4 2012 and a further downward revision of full-year shipment guidance to between 1.7GW – 1.8GW, compared to previous guidance of 1.8GW – 2.0GW.
Based on the guidance, Suntech would relinquish in number 1 ranking to Yingli Green, which recently guided shipments for the full-year to be between 2.1GW – 2.2GW.
Overall, Suntech reported PV product shipments were down approximately 10%, quarter on quarter. Suntech reported that 88% of revenue was generated from the sale of PV modules, 12% from the sale of PV systems, cells, silicon wafers and production equipment.
The company reported gross margin of approximately 5%. Operating expenses were approximately YS$98 million, which was impacted by US$6 million of legal fees related to GSF and other legal matters. Previously announced restructuring and headcount reduction cost US$8 million in Q3, while US$6 million was attributed to the impairment of intangible assets.
Due to on-going accounting investigations of the claimed fraud from its PV project subsidiary, GSF the company is only providing limited financial information.
David King, Suntech's CEO said: “In the third quarter, subsidy adjustments led to slower demand in European markets, however, quarterly shipments grew to Suntech customers in China, Japan and Thailand. With the soft demand environment expected to persist into early 2013, we have taken decisive steps to right-size production capacity and streamline operations, which will reduce production cost and operating expenses over time. We are also working with our banking partners and bondholders to ensure we have a capital structure that will enable Suntech to be successful in the current challenging industry environment. We are confident that these initiatives will strengthen our business and enable us to improve profitability as the market recovers.”