Solar cell maker Neo Solar Power Corp (新日光能源) yesterday reported wider losses for last quarter, as prices plunged amid sagging demand in China.
Losses ballooned to NT$1.87 billion (US$58.8 million) in the third quarter, compared with losses of NT$942 million in the second quarter.
That translated into losses per share of NT$1.82, greater than losses per share of NT$0.96 in the second quarter, while gross margin deteriorated from minus-8.9 percent to minus-42.75 percent over the period, the company said.
“In the third quarter, demand dipped and prices plunged at an unreasonable pace,” Neo Solar said in a statement.
An inventory write-down and equipment depreciation expenses also hurt Neo Solar’s already weak financial performance, the Hsinchu-based company said.
However, Neo Solar said it has seen signs of a price pickup and improved demand in the past month, and factory utilization is improving, boding well for the company’s performance this quarter.
The recovery was already reflected in last month’s revenue, which increased 8.17 percent month-on-month to NT$1.12 billion.
However, Donald Trump’s surprise victory in the US presidential election poses a threat to the industry’s budding recovery and might aggravate oversupply in the global market in the foreseeable future, market researcher TrendForce Corp (集邦科技) said.
“Trump supports fossil fuel over renewable energy, so there is a strong possibility that the US will stop subsidizing the installation of solar panels altogether,” TrendForce analyst Celeste Tsai (蔡旻純) said.
Trump’s energy policies are fossil-fuel-centric and rely particularly on the shale oil industry, Tsai said.
Tax incentives, which were due to be in place through 2022, were expected to help maintain demand in the US at between 8 gigawatts and 13 gigawatts per year during the next three years, but Tsai said the potential policy U-turn could depress the US market, leading to a worsening of the global oversupply problem.
Solar companies “should be well prepared for a period of uncertainty and challenges following Trump’s ascension to the White House,” Tsai said.
Neo Solar shares fell 4.89 percent to close at NT$14.6 in Taipei trading yesterday, while shares of its local peers Motech Industries Inc (茂迪) and Gintech Energy Corp (昱晶能源) fell 8.7 percent to NT$26.25 and 5.24 percent to NT$19.9 respectively.
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