Yingli Energy (China) Co., a unit of the world’s largest solar-panel maker, said it will stop paying a dividend and slow investments to clear debt after facing anti-dumping duties in Europe.
The unit of Yingli Green Energy Holding (YGE:US) Co., which reported seven straight quarters of losses, has 3.27 billion yuan ($34.4 million) left of a combined credit line of 13.3 billion yuan, Yingli Energy said yesterday in a statement on the website of the China Foreign Exchange Trade System.
The European Union on June 5 imposed tariffs of 11.8 percent on panels from China for allegedly selling them in the 27-nation bloc at less than cost. The rate is scheduled to rise to an average of 47.6 percent should Chinese and EU officials fail to reach a consensus.
More than 100 Chinese solar companies, including Baoding-based Yingli and Trina Solar Ltd. (TSL:US), whose main market is Europe, are facing anti-dumping duties. Solar-panel prices declined last year because of a supply glut and weak demand.
Yingli Energy said it’s reducing its reliance on the European market, which accounted for about 54 percent of total sales in the first five months, compared with 62 percent last year.
The company said its capital and cash flow have “obviously improved” since the first quarter as prices rebounded and gross margins started to recover. Gross margin shows how much a company earned after paying production expenses, employee salaries and plant utility bills.
Yingli Energy expects its gross margin to widen to 11 percent in the second quarter from 4 percent in the first three months even after the EU’s initial import tariffs.
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