Yingli Green to ship an extra 1GW in 2013; module prices rising

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A net loss in 2012 of nearly US$500 million was overshadowed by Yingli Green’s shipment guidance for this year increasing by a massive 1GW. 

Yingli Green said that 44% of revenue came from China in the fourth quarter of 2012, yet expects a further 40% increase in module shipments into the domestic market in 2013. The company expects significant market share growth in Japan, while growth will also be seen in certain European markets, the USA and emerging markets.

Based on global PV installations expected to be in the range of 30-32GW in 2013, Yingli Green is targeting around a 10% global market share.  

Despite general overcapacity within the PV industry, Yingli Green’s management said that demand was virtually outstripping supply and that as a result module ASPs stabilised in December, 2012 and have started to increase in January and February of 2013. Overall, Yingli Green expects module prices to rise this year as supply and demand balance is restored.

Notably, the company said that capital expenditure for 2013 would be in the range of US$130million-US$150 million, primarily for equipment maintenance and not for capacity expansions. Therefore, existing nameplate capacity is expected to meet the 1GW of extra shipments expected this year.

Fourth quarter losses

As expected, Yingli Green posted significantly higher module shipments than the previous quarter. The company said shipments were up 40.6% from the third quarter of 2012, generating revenue of US$466 million compared to third quarter revenue of US$355.9 million.

However, continued ASP declines and competitive markets led to a gross loss of US$39.8 million, representing a negative gross margin of 8.5% for the quarter. PV modules gross margins in the fourth quarter were negative 3.5%.

Yingli Green reported an operating loss of US$181.4 million, representing an operating margin of negative 38.9%.

Net loss for the fourth quarter was US$200.5 million.

Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy said: “In the fourth quarter, demand in Europe remained stable as a result of continued demand from Germany and contributions from other European markets, while demand in the US experienced a slight seasonal slowdown. Demand in China continued to expand strongly and led our module shipments in the fourth quarter to increase by 40.6% from the third quarter. The steady development of the utility market and the quickly growing distributed generation segment will likely catapult China to become the largest solar market in 2013. We expect to increase our module shipment volumes to China in 2013 by more than 40% compared with 2012,” added Miao.

Full-year 2012 results

Yingli Green reported full-year net revenues in 2012 of US$1,828.5 million, compared to US$2,332.1 million in 2011, primarily due to ASP declines.

PV module shipment volume in 2012 was 2,297.1 MW, a significant increase of 43.2% from 1,603.8 MW in 2011, which was an increase of 51.1% from 1,061.6MW in 2010.

2012 losses

Yingli Green posted a gross loss in 2012 of US$59.2 million. Overall gross margin was negative 3.2% in 2012, compared to 16.7% in 2011. The company recognized a non-cash inventory provision of US$106.8 million in 2012, which was primarily related to module inventory and did not expect to incur such losses in 2013 due to higher demand.

However, the company reported a net loss in 2012 of US$491.9 million, down slightly from a net loss of US$509.8 million in 2011.

“Because of the demand growth in China, US, Japan and other new markets, we believe that the global solar market will continue to grow in 2013. In addition to building on our success in Europe, China and the US, we will continue to strengthen our marketing and selling efforts in Japan and other regions with high potentials of solar applications, including South America, Southeast Asia and Africa. As a result, we are confident to achieve 3.2GW to 3.3GW of module shipment in 2013,” added Miao.

Production update

Yingli Green held combined manufacturing capacity at 2,450MW at the end of the year. Overall non-silicon costs declined to US$0.47/W, down from US$0.53/W in the third quarter of 2012.

Overall silicon costs were said to have declined to US$0.15/W, down from US$0.17/W in the prior quarter.

Management guided that overall non-silicon costs would be below US$0.45/W by the end of the fourth quarter of 2013. Continued material cost reductions, production optimisation and higher utilisation rates were said to be behind the expected cost reductions.

Q1 2013 guidance

Yingli Green guided module shipments would be down in the high single to mid teens on a percentage basis from the fourth quarter of 2012.

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