Representing an operating margin of -1.8 percent, Hanwha SolarOnes Q2 loss is a significant improvement on its first quarter (Q1) and fourth quarter (Q4) 2010 losses, which were reported as representing an operating margin of -11.6 and -15.7 percent. Chairman and CEO Ki-Joon Hong said, in a statement announcing the Q2 results: "We expect that demand will improve for the remainder of the year."
The Chinese manufacturer has also reported that it wound back its manufacturing activities to cope with falling demand in Q2. This is evident in the total net revenue figures, which were reported as being $277.1 million, a decrease of 18.4 percent from Q1 and 2.2 percent year-on-year. Photovoltaic module shipments were also down, in Q2 worth 205.9 megawatts (MW), down from 248.5 MW in Q1.
Gross profits profit decreased 60.8 percent from Q1, to $21.6 million, representing a 62.1 percent year-on-year drop. Gross margins also declined by almost half from Q1.
Markets
As has been a theme throughout Q2 reports, Italian regulatory uncertainty continued to be sighted as a cause of weaker-than-expected demand. Chinese manufacturers do however continue to report strong and increasing demand from the U.S. market. Hanwha Solar One reported that U.S. demand accounted for 30 percent of shipments in Q2, up from 10 percent in Q1. Canada and India supplied four percent of the companies demand and Australia 11 percent.
In Europe the trend was reversed, with German shipments decreasing to 21 percent from 39 in Q1, with demand from Italy more than halving to five percent of shipments. Hanwha SolarOne stated that it believed buyers were awaiting the confirmation of ongoing feed-in tariff (FIT) rates from these markets before placing orders.
While Hanwha SolarOne did report decreased manufacturing activities, and as a result reduced shipping volumes and operating margins, the company claimed it has not retreated from its plans for further expansion. "We moved forward with our capacity expansion plan, invested in management systems and personnel and made good progress in branding initiatives and research and development," said Hong.
Hanwha SolarOne forecasts full-year module shipments to be at the lower end of the previously announced range one gigawatt (GW) to 1.2GW, with capital expenditure of $400 million.
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