Motech Industries Inc (茂迪), the nation's biggest solar cell maker, yesterday said first-quarter earnings more than quadrupled to NT$256 million (US$8.14 million), helped by recovering demand after governments resumed subsidies for solar panel installation.
That was a strong rebound from net income of NT$48 million in the same period last year. On a quarterly basis, first-quarter results dipped roughly 39 percent from NT$420 million.
Motech blamed the decline to exchange losses of NT$130 million.
“We expect to see a significant improvement in the second quarter as we are adjusting our strategies to hedge against appreciation of the euro [versus local currency],” Motech CEO Chang Peng-heng (張秉衡) told an investor conference, adding that business visibility for this quarter was quite clear.
“At the moment, our equipment is fully loaded. It is difficult for us to meet customer demand,” Chang said. “Europe is showing the strongest demand.”
Most customers are hoping to complete their solar installation projects before the German government adjusts its solar subsidy program, probably later this year, he said, adding that the policy adjustment could cast a shadow on the industry's business outlook for the second half.
Chang took over from Simon Tsuo (左元淮) as the solar cell maker's CEO on March 31. The management reshuffle came two months after the world's top contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), bought a 20 percent share of Motech for NT$6.23 billion in January. Tsuo still serves as chairman of Motech.
Shipments are expected to increase substantially this quarter from last quarter's 154 megawatts and gross margin may improve further, said Tim Huang (黃裕洲), a manager in Motech's accounting department.
Last quarter, Motech's gross margin rose to 14.7 percent, its highest level since the third quarter of 2008, when gross margin was 15.8 percent.
To cope with the strong demand, Motech plans to more than double its capital spending this year to NT$4.6 billion from NT$2 billion last year. Solar cell capacity is expected to surge to 1 gigawatt this year from 600 megawatts last year.
Solar cell shipments would more than double to 825 megawatts from last year's 360 megawatts, which would help Motech achieve its goal of expanding its market share to 8.25 percent from 5 percent last year, Chang said.
In further signs of recovery in the solar industry, the nation's top solar wafer maker, Green Energy Technology Inc (綠能科技), yesterday said that its net income more than doubled to NT$224 million in the January-March period, compared with NT$62.4 million a year earlier.
Gross margin improved to 9.38 percent in the first quarter, from 7.6 percent in the same period of last year and from 7.4 percent last quarter.
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