Suntech

San Francisco, USA / Wuxi, China - Suntech Power Holdings Co., Ltd., by its own account the world's largest producer of solar panels, announced preliminary financial results for the second quarter ended June 30, 2012.

Preliminary results indicate that Suntech's shipments of photovoltaic (PV) products for the second quarter of 2012 increased by approximately 33% from the first quarter of 2012, higher than previous guidance of a 20% increase in PV shipments. Revenues in the second quarter of 2012 were approximately $471 million, a sequential increase of 15%. Approximately 93% of revenues were generated from the sale of PV modules, and 7% of revenues were generated from the sale of PV systems, cells, silicon wafers and production equipment.

Gross margin was impacted by a non-cash inventory provision of $76 million. The impact of the non-cash inventory provision on gross margin was 16%. In the second quarter of 2012, Suntech's operating expenses were approximately $133 million. Operating expenses were impacted by a $56 million non-cash provision related to a prepayment for a long-term supply contract, which Suntech is currently disputing. Suntech generated positive operating cash flow of approximately $5 million during the quarter.

David King, Suntech's CEO, said, "In the second quarter, greater demand from European markets, China, Japan and Australia drove sequential shipment growth, and we continued to progress towards our annual cost targets. However, the global imbalance between supply and demand, and the challenging price environment continue to impede profitability."

Suntech expects shipments of PV products in the third quarter of 2012 to be relatively flat with the second quarter of 2012. The gross margin in the third quarter of 2012 is expected to be in the low single digits. Suntech now expects 2012 annual PV shipments to be in the range of 1.8GW to 2.0GW, compared to previous guidance of 2.1GW to 2.5GW. Mr. King noted, "We are continuing to pursue a number of options to refinance our 2013 convertible notes and intend to address this issue in the near future. In addition, we are making good progress with our due diligence of GSF assets and we will provide an update when we have new developments."

Source: IWR Online, 04 Sep 2012