GCL-Poly Returns to Profit as Solar Silicon Price Rises
GCL-Poly Energy Holdings Ltd. (3800), the largest maker of polysilicon used to make solar cells, returned to profit in the first half as the price of the raw material increased and production costs fell.
Net income was HK$900.4 million ($116 million), compared with a net loss of HK$917.3 million a year ago, the company said yesterday in a filing to the Hong Kong stock exchange. Sales rose 52 percent to HK$17.2 billion.
“The operating environment of the solar industry in the first half of 2014 has significantly improved,” GCL-Poly said. The company expects the world to increase solar installations by 22 percent to 45 gigawatts this year.
The company cut production costs of polysilicon by about 9.2 percent for the first half and is “the lowest cost producer in the industry,” Zhu Gongshan, the company’s chairman and chief executive officer said yesterday on a conference call with analysts.
The average spot price for polysilicon has risen about 16 percent this year because of stronger demand, according to data compiled by Bloomberg. Wafer prices were up 13 percent in the first half from a year ago, GCL-Poly said.
Demand for the commodity used to make photovoltaic cells will jump 15 percent this year, the most since 2011, Bloomberg New Energy Finance forecasts. GCL-Poly and its competitor Wacker Chemie AG in Germany are expanding production, anticipating higher sales will restore margins.
GCL-Poly said in May it will add 25,000 metric tons of granular silicon capacity by 2015 and will increase wafer capacity by 1 gigawatt by the end of this year.
The company had 65,000 tons of polysilicon production capacity and 12 gigawatts of wafer at the end of the first quarter.
The stock fell 3.9 percent to close at HK$2.68 in Hong Kong yesterday before the earnings were announced.
To contact the editors responsible for this story: Reed Landberg at email@example.com Abhay Singh, Keith Gosman