China's Yingli Green Energy has warned that it expects Q3 2012 gross margins to plummet on the back of inventory write downs, lower capacity utilisation and countervailing and anti-dumping duties impact.
The company said that module shipments would be down 17% compared to Q2, while gross margins would be negative 22-24%. Excluding charges and duty provisions, margins would still have been between 0% and 1%, according to the company.
Bryan Li, Executive Director and Chief Financial Officer of Yingli Green Energy said: “Despite the sequential decrease of module shipment and declining PV module selling prices as we expected due to supply-demand imbalance, we are inspired that our industry leadership continues to be solidified as we quickly expand our market share.”
Inventory write downs are unsurprising as Yingli Green had noted in Q2 2012 that inventory levels had increased by approximately US$85.5 million to US$601.5 million in the quarter, with approximately 60% of inventories being classified as finished goods.
Although the company said that it margins would be impacted by the AD/CVD duties in Q3 2012, Yingli Green had noted in the previous quarter that sales in the US had fallen significantly (26%) compared to Q1. Sales in the US in Q2 were only 9% of sales.
With respect to module shipments said to be down 17% in Q3 compared to the previous quarter, Yingli Green does not provide shipment figures in megawatts.
The company had guided in Q2 that full-year shipments would be in the range of 2,100MW to 2,200MW, an increase of 30.9% to 37.2% year on year.
