Yingli Green posts 2Q loss, cuts shipment outlook
Yingli Green Energy Holding Co. Ltd. posted a loss in the second quarter as the Chinese solar industry's price war took a toll on one of its founding members.
The company lowered its shipments guidance for the full year, and Yingli stock, which trades as American depositary shares on the New York Stock Exchange, fell nearly 4 percent in midday trading.
Yingli's net loss in the quarter ended June 30 was RMB 573 million ($90.2 million), or RMB 3.66 (58 cents ) per ADS. That compares with net income of RMB 375.6 million, or RMB 2.34 per share, in the same period a year ago.
Part of the loss came from higher interest payments. The company also suffered a foreign exchange loss of RMB 183.7 million, compared with a gain of RMB 35.5 million a year earlier.
Revenue fell 29 percent, to RMB 3.1 billion ($488.5 million).
Analysts expected a loss of 27 cents per share on revenue of $487.2 million, according to FactSet.
Prices for solar panels have plummeted as supplies surged and sales stalled. Since 2010, the price of polysilicon wafers used to make solar cells has plunged by 73 percent, according to Aaron Chew and Francesco Citro, analysts for Maxim Group. The price of cells has fallen by 68 percent and that of modules by 57 percent.
Yingli now expects to ship solar cells capable of generating 2,100 MW (megawatts) to 2,200 MW this year. That would be an increase of 31 to 37 percent over last year. Yingli said previously that it expected shipments to rise more than 50 percent.
Aside from the wrenching pricing war afoot in the Chinese solar industry, Yingli faces possible anti-dumping tariffs in the U.S. and Europe. The Commerce Department issued a preliminary ruling in May that Chinese producers sold solar cells and panels below fair price and hurt American producers. If that is upheld, tariffs averaging 31 percent could be imposed on Chinese solar-panel imports.
In July, a group of 25 producers of solar gear including companies from Germany, Italy and Spain filed an anti-dumping complaint with the European Union.
Chinese companies have warned that Beijing would retaliate, possibly triggering a trade war.
"Over 60 percent of products are exported to Europe," Wang Shuai, a spokeswoman for Yingli, said in an earlier interview. "If the anti-dumping measures really take effect in Europe, that would be a fatal blow to the industry."
Yingli is based in Baoding, a city 90 miles southwest of Beijing that promotes itself as a center for renewable energy. The local government has attracted 170 companies that produce solar, wind and other clean power equipment. The city's leaders say its clean energy industry had RMB 45 billion ($7 billion) in revenue in 2010, and that is forecast to grow by 30 percent a year through 2016.
As of last week, five major Chinese manufacturers, including industry leader Suntech Power Holdings Ltd., had reported losses of nearly $250 million in their latest quarters. One company — LDK Solar Co. — reported an eye-popping loss of $588.7 million.
Yingli shares fell 7 cents, or 3.6 percent, to $1.88 in afternoon trading.