Solarworld Sees Second-Half Sales Jump, Bucking Price PressuresBy
German module maker sees 2016 sales of up to 1 billion euros
Product innovations, global demand to cushion price pressures
Solarworld AG said it’s confident it can overcome pressure to cut prices on the solar modules it sells and focus on higher-yielding products as it reduces costs to keep profit growing.
The German manufacturer boosted second-quarter sales by 30 percent to 222 million euros ($249 million) from a year ago, the Bonn-based company said Monday. It confirmed it’s on track this year to boost sales 20 percent to as much as 1 billion euros. Solarworld said the U.S. provided half its revenue in the second quarter, with increases also coming from Europe, Asia and Africa.
Chief Executive Officer and founder Frank Asbeck said Solarworld will weather pressure on module prices emerging since June.
“I’m convinced that we can maintain and expand our market position” as the company implements cost-saving production technology as well as focuses sales on higher power-yield modules that collect the sun’s rays from both sides, Asbeck said by e-mail.
Delayed utility-scale orders in the U.S. and slower economic growth in China is pushing solar manufacturers to seek growth abroad and weighing on the industry’s outlook. SunPower Corp., a U.S. module maker, dropped a “guidance bomb” last week saying it expects to lose as much as $175 million, reversing an earlier forecast of earnings of $50 million. SMA Solar AG, which makes solar inverters in Germany, said it would stop production in the U.S. to save money as prices drop and projects get delayed.
Weathering a new round of competition from China may not be Solarworld’s only serious challenge. A legal battle with polysilicon supplier Hemlock Semiconductor Inc. has left Solarworld with the possibility of shouldering a $770 million damage claim. A U.S. district court last month ordered the German company to pay damages to Hemlock for failing to pay for polysilicon supplies it ordered. Solarworld will appeal the ruling.
Solarworld’s cash reserves shrank from 189 million euros at the end of last year to 148 million euros at the end of June, raising a question about its ability to cope with Hemlock’s damage claim. The company on Monday reported a first-half loss of 5.2 million euros in earnings before interest and tax.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- Producer and DJ Known as Avicii Has Been Found Dead
- Deutsche Bank's Bad News Gets Worse With $35 Billion Flub
- Wells Fargo's $1 Billion Pact Gives U.S. Power to Fire Managers
- Oil Shrugs Off Trump Tweet to Rise for a Second Straight Week
- The U.K. Just Went 55 Hours Without Using Coal for the First Time in History