Sinovel Posts First Profit in Three Years After Receivables Sale

Sinovel Wind Group Co., a Chinese maker of turbines, reported its first profit in three years after selling receivables and tightening costs.

Net income at the Beijing-based manufacturer totaled 80.7 million yuan ($13 million) in 2014, compared with a loss of 3.45 billion yuan the previous year, according to a statement to the Shanghai stock exchange Monday. Sales increased 0.4 percent to 3.62 billion yuan.

The company in December sold some receivables to Fu Hai Xin Neng Investment Center and Da Lian Hui Neng Investment Center, raising 1.78 billion yuan.

Sinovel’s return to profitability is only one step for a company embroiled in several legal disputes. At least six senior officials resigned this month and the China Securities Regulatory Commission is still probing the company on suspected violations of securities laws and regulations, Sinovel said last week.

The company posted a loss of 248 million yuan in the first quarter, wider than its 171.2 million yuan loss a year earlier. Revenue in the quarter fell 84.1 percent to 228 million yuan.

The company, once China’s biggest supplier of wind turbines, declined to 10th at home in 2014, according to the China Wind Energy Association.

Wind turbine shipments in China rose last year as the nation added a record 21 gigawatts of wind power, exceeding the previous high of 18 gigawatts in 2011, according to data compiled by Bloomberg.

Sinovel last year collected some receivables at prices lower than book value in a bid to pay back debt and was exempt from compensation for quality loss and debt from some suppliers, it said in January.

The stock rose 2.2 percent to close at 7.42 yuan in Shanghai trading before the earnings were announced. The shares have more than doubled this year.

— With assistance by Feifei Shen, and Ehren Goossens

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