Hanwha Q Cells increased revenue in Q3 and widens loss y-o-y due to the discontinuation of ingot manufacturing operations in China

Korean module manufacturer Hanwha Q Cells Co. Ltd. achieved in the third Quarter total net revenues of $559.3 million, up 7.9 percent from $518.4 million in the second quarter of 2018 and up 3.0 percent from $543.0 million in the third quarter of 2017. According to the company, this was due to increased shipment volume, which mitigated the effects of declining ASPs, and an increase in demand for the company's premium product »Q.PEAK DUO«.
Gross loss in the third quarter of 2018 was $35.3 million, compared to a gross profit of $72.6 million in the second quarter of 2018 and a gross profit of $63.2 million in the third quarter of 2017. Excluding a $108.2 million one-time loss associated with the discontinuation of the company's China-based ingot manufacturing operations in September, gross profit for the third quarter of 2018 was $72.9 million.
The company concluded »that it would be in its best interest to discontinue unprofitable operations and focus on its core business«, the manufacturing of cells and modules. »This decision was based on the fact that the current scale of ingot operations would preclude the company from being competitive on a global scale, and while the discontinuation of ingot production resulted in a one-time loss, the company believes it will improve long-term profitability by allowing us to focus its core competencies.«
Loss from operations in the third quarter of 2018 was $107.0 million, compared with income from operations of $4.8 million in the second quarter of 2018 and $10.6 million in the third quarter of 2017. Excluding the one-time effects related to the discontinuation of ingot manufacturing operations as well as a $16.7 million allowance for bad debt on certain overdue receivables, operating income for the third quarter of 2018 was $17.9 million.
Net loss attributable to company's ordinary shareholders was $164.6 million in the third quarter of 2018, compared with net loss of $41.3 million in the second quarter of 2018 and net income of $5.0 million in the third quarter of 2017. Excluding certain one-time effects as well as foreign exchange losses, net income attributable to company's ordinary shareholders for the third quarter of 2018 was $2.7 million.
As of September 30, 2018, the company's in-house, annualized production capacities were 4,500 MW for cells and 4,500 MW for modules. Furthermore, the additional module availability is 3,900 MW (annualized) from Hanwha Q Cells Korea Corporation, an affiliate of the company. Moreover the company expects to have another nameplate capacity of 1,700 MW in the United States in the first quarter of 2019.
For the fourth quarter of 2018, the Board of Directors estimates net revenues in the range of $590 to 610 million. For the full year 2018, the company expects total module shipments in the range of 5,500 to 5,700 MW.
© PHOTON

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