The nation’s biggest solar cell maker, Motech Industries Inc (茂迪), expects to swing back to profit this quarter as demand recovers after some countries, such as the US and Japan, resumed subsidies for solar installations amid a recovering economy, a company executive said yesterday.
The strong rebound in the fourth quarter may help turn 2009 into a profitable year, Motech chief executive officer Norman Shen (沈楨林) told an investor conference.
“We believe Motech’s operation will improve significantly from next quarter after hitting the bottom in the second quarter,” Shen said. “The fourth quarter will be the best quarter this year in terms of sales and gross margin .... Factory utilization will be full.”
Japan, the US and European countries such as Germany and Italy would be the main growth areas as their governments recently decided to subsidize solar installations again, Shen said.
Motech accumulated losses of NT$389 million (US$11.95 million) in the first nine months of the year as prices plunged more than 60 percent year-on-year to about US$1.30 per watt because of overcapacity and dwindling demand.
Prices are forecast to stabilize over the next five quarters, Shen said.
Shen expects the recovery to carry over into next year and plans to boost production capacity to nearly 1 gigawatt next year, from 600 megawatts this year to cope with rising demand. That would mean an aggressive increase in capital spending from this year’s NT$3 billion.
Motech plans to raise funds for the expansion in the first half of next year, Shen said.
Local rival E-Tone Solar Tech Co Ltd (益通光能) shared Motech’s optimisim.
“I don’t see major negative factors ahead ... I believe drastic price declines will spur demand,” E-Tone financial executive Lo Lai-hwang (羅來煌) said.
Lo said US demand looked strong as the administration of US President Barack Obama pushed hard for a green energy policy.
E-Tone plans to spend NT$1.5 billion to build new two new production lines next year, which will boost capacity by about 37 percent to 440 megawatts next year. Its estimated capital spending for this year is NT$1.62 billion.
The company expects quarterly earnings to grow further this quarter after returning to the black in the third quarter, during which it earned NT$85.38 million.
On a full-year basis, however, it expects to remain in the red, with cumulative losses in the first nine months reaching NT$564 million.
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