Hanwha SolarOne Drops on China Slowdown-Driven Loss

Hanwha SolarOne Co. (HSOL), the Chinese photovoltaic manufacturing unit of South Korea’s Hanwha Group, fell after reporting a first-quarter loss on lower demand in China and a weaker currency.

The company’s American depositary receipts fell 11 percent to $2.47 at the close in New York, the most since March 26. Each ADR is worth five ordinary shares.

Hanwha reported a loss of 133.4 million yuan ($21.4 million), or 24 cents an ADR, compared to a loss of 225.9 million yuan a year earlier, the Qidong, China-based unit said today in a statement. The loss widened more than six-fold from the fourth quarter.

The loss was mainly due to seasonal weakness and delayed projects in China and the devaluation of the Chinese yuan, Nam Seong-woo, Hanwha SolarOne’s chief executive officer who was appointed on Apr. 30, said in the statement. Revenue rose 2.3 percent to 1.1 billion yuan. Japan accounted for 51 percent of sales.

China, which had accounted for 16 percent of sales in the fourth quarter, wasn’t listed among countries shipped to last quarter. The yuan depreciated 2.7 percent in the quarter.

“China demand is beginning to warm,” Nam said. Stronger demand in China is expected to boost shipments 14 percent in the second quarter from the first, he said.

“A strong second half of the year is expected in this market as the government increases incentives and improves the availability of credit for select companies,” said Nam.

Hanwha reaffirmed its expectation to ship 1.5 to 1.6 gigawatts of panels this year, according to the statement.

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net Jasmina Kelemen, Carlos Caminada

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.