China Sunergy Q2 loss expands, cuts 2012 shipments forecast

Aug 30, 2012 - Solar cell and module maker China Sunergy Co Ltd (NASDAQ:CSUN) today posted a second-quarter net loss of USD 30.3 million (EUR 24m), nearly doubling the USD-16.9-million loss from a year ago, and cut its full-year shipment guidance.

The net result included USD 7.9 million in interest expense and an exchange loss of USD 12.6 million.

The company’s efforts to cut its manufacturing costs could not cope with the further drops in the selling prices of solar modules in the April-June period, it said. The depreciation of the euro against the US dollar also had a negative effect on Sunergy’s performance. These factors led to a negative gross margin of 0.3%, against a positive 1.1% in the preceding quarter.

Revenue declined to USD 110.4 million from USD 144 million. Yet, sales grew 61.2% quarter-on-quarter thanks to higher sales to Italy, Germany and Denmark. In fact, Germany and Italy brought 27.5% and 23.5%, respectively, of total sales, while Bulgaria accounted for 9.4%.

Sunergy shipped 150.3 MW, including 144.5 MW of modules, during the reporting period, in line with its expectations and 68.3% more than a year back.

In the third quarter the company sees shipments of 80 MW-85 MW, a gross margin at the breakeven level and a negative net result. It said it expected that the tough environment in the sector would continue through 2012 so it cut its full-year shipment projections to 400 MW-420 MW from 500 MW-550 MW forecast earlier.

(USD 1 = EUR 0.797)

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