Tier-one PV manufacturer Hanwha Q CELLS' PV module shipments have increased 12.2% quarter-over-quarter, driven by shipments to the US, which accounted for 37% of total shipments by revenue in the second quarter.
Hanwha Q CELLS was able to increase shipments to US as its production facilities in Malaysia and South Korea are not impacted by US anti-dumping duties and as a result sales and shipments to the US have rapidly become its major market.
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The company also benefited from strong demand in Japan, accounting for 21% of its 2Q shipments in the second quarter.
However, the EMEA region accounted for only 8% of total shipments, compared to 34% in the first quarter of 2015, due to a significant pull-in of business during the first quarter ahead of an expected rise in the EU Minimum Import Price (MIP).
Sales in the EMEA region were also impacted by strong UK demand in the first quarter ahead of major FiT changes and the pause in the second quarter,
With higher demand and selling margins in the US and Japan, Hanwha Q CELLS is able to limit its shipments into China, which offer some of the lowest margins in the industry. The company said that it expected to maintain shipments in China to 5-10% of total shipments for the remainder of the year.
Total shipments included 561MW of external shipments, 25MW of OEM and 28MW of shipments to its own downstream projects.
Total revenue in the first quarter of 2015 was US$338.0 million, an increase of 1.3% from the previous quarter, while gross profit rose 20.7% quarter-over-quarter to US$58.4 million. Gross margin improved 277 basis points quarter-over-quarter to 17.3%, exceeding the company's guidance of 15-17%.
Seong-woo Nam, chairman and CEO of Hanwha Q CELLS said: “The second quarter was the first full quarter reflecting the merger with Q CELLS in February of this year. In particular, shipment volumes were higher and growing, gross margins are expanding, our product quality is much improved, and our manufacturing scale and efficient production contributed to further reductions in our cost structure. Our ability to ship modules duty free to the US from plants in Malaysia and Korea greatly enhances our competitive position in that market, which now represents more than a third of our total shipments. We expect our US presence to improve further as we will begin to ship modules to NextEra to fulfill the 1.5 GW contract. Pricing remains higher in the US than other markets, so a bigger presence there will improve our profitability going forward.”
Guidance
Hanwha Q CELLS said it expected third quarter total shipments to be between 800MW to 820MW and gross margin should exceed 18%.
The company reiterate dits full-year guidance of total module shipments of 3.2-3.4GW and gross margin of 17-19 %.
The company is seeing continued strong demand, reflected in increasing manufacturing utilisation rates compared to the previous year. The company noted that it expected utilisation rates to be effectively at 100% by year-end, up from 82% in the first quarter of 2015.
“We remain on track to expand to 4.3 GW in both cell and module nameplate capacity by year end, making us one of the largest solar manufacturers in the world. Our fully-automated production facilities continue to enhance product quality and reduce costs. Our target of reaching fully optimized module manufacturing costs of low US$0.40/W by year end is in sight and achievable,” added Nam.
