Gintech Energy Corp (昱晶) yesterday reported its first quarterly loss in five quarters, as prices plunged amid sluggish demand from China.
The solar cell manufacturer swung into a quarterly loss of NT$2.56 billion (US$80.1 million) during the quarter ending Sept. 30, compared with a quarterly net profit of NT$93 million in the second quarter and NT$139 million in the third quarter last year.
That was the deepest quarterly loss Gintech has ever booked in its history.
Gross margin tumbled to minus-104.9 percent last quarter, from 6.5 percent a quarter ago and 9.7 percent a year earlier, the company’s financial statement showed.
Gintech blamed a downward spiral in solar cell prices and lower factory utilization fot the poor gross margin.
In addition, a raw material prepayment write-off of NT$1.2 billion cut into its margins, Gintech said.
Excluding the one-off write-off, gross margin would have fallen to minus-49.6 percent last quarter, it said.
However, the company expects some improvement, saying: “We believe the industry has gone through a short-term adjustment resulting from a temporary slowdown in the Chinese market.”
China is the world’s largest solar market with annual installation forecast to reach 21.56 gigawatts this year, accounting for 34 percent of the global solar market, TrendForce Corp (集邦科技) said.
Average selling prices have rebounded more than 20 percent recently, after touching bottom last quarter, the company said.
Gintech attributed the price recovery to the introduction of China’s new subsidy programs for solar installation projects as well as output cuts last quarter.
“We expect our profitability to improve as we see a more stable pricing environment in the coming months. We are also boosting utilization to meet a pickup in demand,” it said.
Gintech’s revenue rose 14.7 percent to NT$822 million last month from NT$716 million in September. The figure was the highest since July.
Gintech shares fell 0.5 percent to NT$19.80 yesterday, while local rivals Motech Industries Inc (茂迪) and Neo Solar Power Corp (新日光能源) climbed 0.38 percent and 3.08 percent to NT$26.35 and NT$15.05 respectively.
Motech and Neo Solar reported quarterly losses of NT$999 million and NT$1.87 billion respectively.
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