Yingli Cuts Outlook, Sees Charge as Solar Panel Sales Drop

Updated on
  • Says charge will have `significant' impact on third quarter
  • Reduces PV shipment outlook at least 22% from first quarter

Yingli Green Energy Holding Co., which was the biggest solar panel maker until last year, slashed its outlook for shipments and said it will write down the value of its assets, resulting in a “significant” charge in the third quarter. Its American depositary receipts fell to the lowest on record.

The Chinese manufacturer said it expects to deliver 2.5 gigawatts to 2.8 gigawatts of panels this year, at least 22 percent below its previous guidance for 3.6 gigawatts, according to a statement on its website Tuesday. The net loss more than doubled to 598 million yuan ($94 million) in the second quarter from 285 million yuan a year ago.

The disclosures mark the latest blow to Yingli, which has reported 16 consecutive quarterly losses as competitors such as Trina Solar Ltd. recovered from a plunge in the cost of photovoltaic panels. Yingli Chairman Liansheng Miao said he’s considering a number of options to refinance debts due in the next few months, including liquidating idle assets and bringing in new investors.

“These measures will help us enhance our cash position and allow us to gradually improve our balance sheet,” Miao said in a statement from the company’s headquarters in Baoding, China.

ADRs Slump

Yingli fell 20 percent to 58 cents at the close in New York, the lowest since trading began in June 2007.

Last month, Yingli warned its profit would be hit by lower selling prices for PV panels and because of fluctuations in the euro-yuan exchange rate. On Tuesday, the company said sales dropped 20 percent to $438 million in the second quarter, short of the median of four estimates collected by Bloomberg for sales of $522 million.

Factory utilization was lower than the company expected in the second quarter, and Yingli said that level of activity will continue for the rest of this year. It’s analyzing the financial impact and expects to write down the assets when it next reports earnings.

“The company expects to recognize a significant amount of non-cash impairment charge on those production facilities in the third quarter of 2015, which will have a material adverse effect on the company’s financial results,” Yingli said in the statement.