Bloomberg News

Trina Expects Higher Solar Shipments After Loss; Shares Fall

February 24, 2012

(Updates with share drop, analyst from third paragraph.)

Feb. 23 (Bloomberg) -- Trina Solar Ltd., a Chinese maker of solar panels, said it expects to boost shipments by as much as 39 percent this year after lower prices resulted in a fourth- quarter loss. The shares fell to a two-week low.

The fifth-biggest panel maker will ship as much as 2.1 gigawatts of photovoltaic modules compared with 1.51 gigawatts in 2011, the Changzhou-based company said today in a statement. The net loss of $65.8 million compared with a profit of $145.3 million in the year-earlier quarter.

Trina shares fell as much as 10 percent and were down 9 percent to $8.88 at 12 p.m. in New York, their lowest since Feb. 8. That may be more due to today’s news of subsidy cuts in Germany than Trina’s earnings, which “weren’t that bad” with no “fireworks,” Aaron Chew, analyst at Maxim Group LLC in New York, said today in an interview.

“Pricing just always drops in solar,” Chew said. “As long as subsidies are there and keep getting cut, prices will follow.” Solarworld AG and Conergy AG had similar slumps in shares in Frankfurt, with both sliding at least 8.2 percent.

Germany’s plans could see support for solar slashed by as much as 29 percent from March 9 with further decreases each month beginning in May. Plants larger than 10 megawatts won’t get support after July 1.

Trina plans to expand capacity even after the average prices for modules almost halved last year on oversupply, driving down the shares of manufacturers. Trina has lost 69 percent of its market value in the past 12 months, compared with Suntech Power Holdings Co., which is down 66 percent, and LDK Solar Co.’s 56 percent drop.

‘Biggest Problem’

The company is losing money as panel prices fall, Chew said, adding that he doesn’t know what Trina is going to do to start making money again. “That’s their biggest problem right now,” he said.

“We see evidence of increasing solar demand in markets less dependent on support,” Chairman Jifan Gao said in today’s statement.

Trina expects its first-quarter gross margin will be in the “low teens in percentage terms” after negotiating new lower- cost supply agreements for silicon, the raw material in its panels. The margin was 7.1 percent in the fourth quarter.

The company said it also expects to boost its production capacity by as much as 500 megawatts to about 2.4 gigawatts by the end of the first half.

Trina reported revenue of $2.05 billion last year, a 10 percent increase from 2010. It swung to a full-year loss of $37.8 million from a profit of $311.5 million the previous year.

--Editors: Randall Hackley, Stephen Cunningham

To contact the reporters on this story: Louise Downing in London at ldowning4@bloomberg.net; Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Randall Hackley at rhackley@bloomberg.net


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