A net loss of US$152.6 million summed-up the poor business conditions Yingli Green experienced in the third quarter, after pre-warning the financial markets of a massive hit to margins.
Total net revenue was US$355.9 million, down significantly from the previous quarter when revenue reached US$488.5, and down from over US$500 million in Q1 2012.
Having retained its recently revised module shipment guidance for the full-year to be between 2,100MW – 2,200MW, PV Tech estimates revenue for the fiscal year 2012 to be around US$1.68 billion, after estimated revenue being down approximately 6% (US$335 million) in Q4 2012. Depending on actual ASP declines, the full-year figure could be lower. The company guided shipments to be up in Q4 2012 in the low teen percentage range, but did not provide Q4 revenue guidance. However, Yingli Green guided gross margin to be in the range of 0 – 2%.
The company reported Q3 module shipments being down 16.9% from Q2, generating a gross loss of US$80 million, an operating loss of US$148.2 million and a net loss of US$152.6 million.
Gross margin was negative 22.7%, compared to gross margin of 4.6% in the prior quarter. An inventory provision, capacity under-utilisation charge and declining ASPs were contributing factors to the losses in the quarter.
PV Tech estimates that Yingli Green will continue to make a loss in Q4 and in the full-year overall.
Yingli Green noted that domestic shipments within China in Q3 increased significantly as PV project business started to build. The company reported that China accounted for 28% of total net revenue, up from only 14% in Q2 2012, while shipments increased 74% q-on-q. The company said it expected 20% of full-year revenue to be generated from China in 2012. However, the company had said in Q1 2012 that it expected China to account for 30% of revenue this year. China accounted for 22% of revenue in 2011.
The company also noted that total module shipments in the quarter to its major market, Germany declined 16.9% q-on-q, due to the slowdown in demand after the feed in tariff cuts were made in the country at the end of Q2. Germany accounted for 48% of revenue in Q3, down from 57% in the prior quarter.
The US accounted for 11% of revenue in Q3, compared to 9% in the prior quarter, although this was lower in actual revenue terms due to the lower reported revenue in the quarter when compared to Q2 revenue.
The company also highlighted that demand remained firm in the fourth quarter due to demand outside of Europe. However, Ying Green noted that its order book for Q1 2013 was being supported by project installation deadlines at end of March in UK, Greece and Spain, while emerging markets of Israel, Romania, Poland, Turkey and Ukraine will generate incremental demand in Europe as German installations track downwards in 2013.