Green Energy Technology Inc (綠能科技), the nation’s top solar wafer maker, yesterday said its gross margin would further expand this quarter because of rising output and higher prices on the back of global supply constraints.
The Taoyuan-based company’s factories have been running at full capacity since early this year on the back of a strong rebound in the solar business.
“We haven’t seen signs of a downcycle on the horizon,” Green Energy president Lin Hur-lon (林和龍) told investors. “The industry is still growing ... US and Asian markets are catching up with Europe and becoming new growth areas.”
This quarter, gross margin is expected to rise to more than 20 percent, from as high as 16 percent in the third quarter, after an expansion in output, chief executive Polar Hsieh (謝國雄) said.
Green Energy said annual capacity was expected to grow to 1.1 gigawatt at the end of the year, a spike of 57 percent from 700 megawatts in the third quarter.
The average selling price for solar wafers is expected to rise to US$3.70, from US$3.40, because of global supply constraints, the company said.
“Orders are 1.5-fold over our capacity,” Green Energy vice president Swean Lin (林士源) said.
To better satisfy customer demand, Green Energy plans to spend NT$5.9 billion, slightly higher than the NT$5.77 billion it originally planned, to build a new plant in southern Taiwan.
The new plant is scheduled to start operations in April.
Green Energy has not released audited third-quarter financial results yet, but the company expects net profits to be largely in line with a consensus forecast of NT$202 million (US$6.56 million), or NT$0.90 per share, after deducting NT$250 million in impairment costs from its convertible bonds issued on Oct. 24, 2008.
The impairment charges stem from the higher market value of its stock, which closed at NT$97.40 on Sept. 30, against its conversion price of NT$81.90 per share.
The company added that it had booked NT$50 million in foreign exchange losses because of the New Taiwan dollar’s appreciation against the US dollar, adding that a stronger currency would hurt its profits.
Each 1 percent rise in the NT dollar against the greenback would erode its net profit margin by 0.6 percentage points, it said.
The company said earlier this month that third-quarter revenues hit a record high at NT$46.18 billion, up 25 percent from NT$3.71 billion in the second quarter.
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