Hanwha Q CELLS Returns To Profitability, Downgrades 2018 Guidance

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South Korean solar manufacturer Hanwha Q CELLS announced its latest quarterly earnings this week, revealing that the company returned to profitability in the first quarter of 2018 after a net loss in the previous quarter, but tempered the news by downgrading its 2018 shipping guidance.

Hanwha Q CELLS had a relatively solid 2017 but fell at the finish line, reporting its first net loss for the year of $53.7 million due to discontinuation of its wafer manufacturing operations and bad debt expenses. However, the company turned things around in the first quarter of 2018, reporting net revenues of $443 million — compared to $636.2 million in the fourth quarter of 2017 and $432.0 million in the first quarter of 2017 — and net income of $31.0 million,  compared with its net loss previous quarter and net income of $17.6 million in the first quarter of 2017.

According to Seong Woo Nam, the company’s CEO, the company “returned to profitability” in the first quarter of 2018 due to a “timely shift in the geographical mix of shipments, favorable raw material price movements” and by realizing the effects of “shutting down unprofitable operations.”

The company’s gross margin for the quarter was an impressive 17.8%, up from the 8.6% in the previous quarter and 13.8% in the same quarter a year earlier, and earnings per diluted share of $0.37 for the quarter, compared to a loss of $0.65 in the previous quarter and a profit of $0.21 in the first quarter of 2017.

Current production capabilities for Hanwha Q CELLS amounts to 1,600 megawatts (MW) for ingots, 4,300 MW for cells and 4,300 MW for modules. The company also has additional module availability of up to 3,700 MW as of the end of the first quarter.

Hanwha Q CELLS’ Senior Vice President of Global Sales and Marketing, Joo Yoon, noted that his company’s “first quarter shipments were in-line with the Company’s guidance set forth in the Q4 earnings call” and that Europe has effectively replaced the United States as the company’s number one market in the wake of the trade barriers put in place by the Trump Administration.

Looking forward, the company expects net revenues for the second quarter to be in the range of $490 million to $510 million. However, while this is in line with what the company accomplished in the first quarter, it has nevertheless downgraded its guidance for total shipments for 2018 from between 6,000 MW to 6,200 MW, down to being in the range of 5,600 MW to 5,800 MW.