Suntech Power, a China-based producer of solar panels, announced financial results for its first quarter ended March 31, 2012.
Total net revenues for the first quarter of 2012 were US$409.5 million, a decrease of 34.9% from US$629 million in the fourth quarter of 2011 and a decrease of 53.3% from US$877 million in the first quarter of 2011, according to Suntech. The sequential decrease of revenues was due to a decline in shipments and a decline in the average selling price of solar products.
For the first quarter of 2012, said Suntech, gross profit was US$2.4 million and gross margin was 0.6% compared to US$62.3 million and 9.9%, respectively, in the fourth quarter of 2011; and US$182.7 million and 20.8% in the first quarter of 2011. Gross profit and gross margin in the first quarter of 2012 were impacted by a provision for preliminary US countervailing and anti-dumping duties of US$19.2 million, or 4.7% of revenues, added Suntech. The sequential decline in gross margin was further impacted by sales price declining faster than the cost of production, Suntech stated.
Suntech reported net loss attributable to holders of ADS was US$133.0 million for the first quarter of 2012, compared to a net loss of US$148.8 million for the fourth quarter of 2011 and net income of US$31.9 million for the first quarter of 2011.
"First quarter shipments were 27% lower than our fourth quarter shipments, which is better than our previous projection of a 30% decline. The sequential decrease in shipments was primarily due to limited inventory on hand early in the quarter and a planned reduction in our production level over Chinese New Year," said Zhengrong Shi, Suntech's chairman and CEO. "During the quarter, we reduced our total production cost by 6% sequentially, despite lower utilization, and maintained a healthy cash balance."
Capex totaled US$22.6 million in the first quarter of 2012, Suntech indicated, compared to US$37.6 million in the fourth quarter of 2011 and US$128.5 million in the first quarter of 2011. Capital expenditures in the first quarter of 2012 were primarily related to payments for equipment and services that had already been received, according to the firm.
Suntech expects shipments in the second quarter of 2012 to increase by more than 20% from the first quarter of 2012 and gross margin to be in the range of 3-6%.
For the fiscal year ending December 31, 2012, Suntech maintains the guidance for shipments to be in the range of 2.1-2.5GW.
The firm also expects to maintain cell and module production capacity at 2.4GW and wafer capacity at 1.6GW in 2012. Full year 2012 capex are expected to be in the range of US$120-150 million. The 2012 capex will primarily be related to payments for equipment and services already received, and technology upgrades to production lines, said Suntech.
