Motech Industries Inc (茂迪), the nation’s biggest solar cell maker, saw its net income decline 54 percent to NT$680 million (US$236,400) in the first quarter of this year as a result of weakening demand and lower prices, chief financial officer Jack Hsieh (謝祖葳) said.
The Tainan-based company, in which Taiwan Semiconductor Manufacturing Co (TSMC 台積電) owns 20 percent stake, is cautious about the outlook for green energy businesses for the rest of the year, with average selling prices expected to fall further.
“The sector’s sophisticated value chain deepens uncertainty, although rising crude oil prices are encouraging in the long-run,” Hsieh told an investor conference in Taipei.
Italy’s recent policy change to cut green energy subsidies because of the country’s debt woes has cast a shadow over the market, he said.
Last year, Italy accounted for 21 percent of overall global solar panel installation of 18.2 gigawatts, making it the world’s second-biggest solar market after Germany.
The powerful earthquake and tsunami on March 11 is expected to squeeze financial support for solar subsidies in Japan, further sapping demand.
Against this backdrop, Motech’s revenue was NT$10.24 billion in the first quarter, falling 20 percent from three months earlier, the report showed.
Gross margin shed 7.4 percentage points to 12.5 percent in the first quarter from the previous quarter, while net margin dropped 4.8 percentage points to 6.6 percent, Hsieh said. Gross operating margin was 8.9 percent in the first quarter, down 5.2 percentage points from the previous quarter.
The latest financial figures translated into earnings of NT$1.8 per share at the end of last month, declining 57 percent from the preceding three months, Hsieh said.
On a yearly basis, consolidated revenues expanded 68 percent from the same period last year, when the sector hit rock bottom, Hsieh said.
Looking forward, Motech remains cautious and will adopt a conservative approach, Hsieh said.
“A downward pricing trend in the long-run is necessary for the photovoltaic module market to develop” to become commercially viable, he said.
For the rest of the year, the company aims to focus on upstream integration, targeting lower costs and better quality wafers, Hsieh said.
Meanwhile, Motech will seek to keep up with market growth in midstream expansion and boost its local presence in terms of downstream expansion, he said.
The company secured a syndicated loan of NT$7.2 billion in February, allowing Motech to strengthen its financial structure and back up its capital expansion.
Motech shares fell 0.43 percent to NT$116 at close of trade on the local bourse yesterday, worse than the TAIEX’s 0.09 percent fall.
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