Hanwha SolarOne's shipments higher despite weak demand

First quarter revenue and shipments at Hanwha SolarOne increased sequentially, despite weak demand.

Total net revenues were US$335.2 million, an increase of 3.9% from 4Q10 and an increase of 48.7% from 1Q10. PV module shipments, including module processing services, reached 248.5 MW, an increase of 13.6% from 218.8 MW in 4Q10 and an increase of 65.0% from 1Q10. However, ASP declines and slightly higher material costs resulted in gross margins falling to 16.3% down from 20.3% in 4Q10.

Interestingly, Hanwha SolarOne noted that revenue from Germany actually increased 39% in the quarter, compared to a 25% increase seen in the previous quarter. However, the PV module manufacturer couldn’t buck the trend in Italy in the quarter – reporting revenue decreased from 19% in 4Q10 to 11% in 1Q11.

Opening-up and developing further markets outside of Europe were also key to revenue generation in the quarter, according to the company. Hanwha SolarOne noted that 9% of sales came from inside China, while the US accounted for 10% of shipments.

Australia remained a relatively strong market for in the quarter, rising to 10% of shipments in 1Q11. Other notable markets were the Netherlands, a port of destination for deliveries to countries throughout Europe, which accounted for 10% of shipments in 1Q11, according to the company.

"During a period of demand uncertainty resulting from regulatory changes in large markets such as Germany and Italy, we are quite pleased that we were able to record good shipment growth during the quarter,” noted Dr. Peter Xie, President and CEO of Hanwha SolarOne. “Although the demand environment for the second quarter of 2011 remains fluid, we are confident that there will be a rebound in the second half of 2011." 

However, shipment guidance for the second quarter was set at 200MW, of which about 20% will be for PV module processing services. This is significantly down on first quarter shipments of 248.5MW, indicating a significant inventory overhang in key markets.