Aug. 24 (Bloomberg) -- GCL-Poly Energy Holdings Ltd., the biggest maker of polysilicon and wafers for solar cells, reported its first loss since the second half of 2009 as Europe’s financial crisis curbed the solar-energy business.
The loss was HK$330 million ($43 million) in the six months ended June 30 compared with HK$3.55 billion profit a year earlier, GCL-Poly said yesterday in a filing to the Hong Kong stock exchange. Revenue fell to HK$11.8 billion from HK$15.2 billion.
“Due to factors such as cyclical oversupply of the industry, the European debt crisis and the European subsidy policy changes, the Company’s performance was affected,” Hong Kong-based GCL-Poly said.
The loss underscores the challenges facing the solar industry as companies deal with an oversupply that’s depressed prices and trimmed profit margins. The 17-member BI Global Large Solar index has fallen 64 percent in the past year.
MEMC Electronic Materials Inc., the second-largest U.S. polysilicon maker, reported its fourth consecutive quarterly loss on Aug. 8 due to lower prices. Trina Solar Ltd., the third biggest solar module maker, reported a second-quarter net loss of $92.1 million as industry overcapacity and demand constraints contributed to falling prices.
Wafer prices have dropped 44 percent this year while the average spot price of polysilicon, the raw material for most solar panels, is down 23 percent, Bloomberg New Energy Finance data shows.
“We expect the core business of the company to remain at a loss given the persistent pricing pressure” because of the supply glut, ICBC International Securities Ltd. said in a Aug. 13 note to clients.
The price decline has prompted 80 percent of Chinese polysilicon factories to suspend production, Liu Hanyuan, board chairman of Tongwei Co., said this week in Beijing.
GCL-Poly, along with LDK Solar Co., Daqo New Energy Corp. and China Silicon Corp., have asked the government to start a probe to determine whether exporters from the U.S. and South Korea sold solar-grade polysilicon below costs.
The company is increasing development of its solar-power business. GCL-Poly said on Aug. 2 that it agreed to partner with China Merchants New Energy Group to develop at least 973 megawatts of solar power plants in China in the next three years.
The stock rose 2.5 percent to close at HK$1.23 in Hong Kong yesterday before the announcement.
To contact Bloomberg News staff for this story: Feifei Shen in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Reed Landberg at email@example.com