Shipments up, revenue down in preliminary SolarWorld Q3 results as module price slump bites

SolarWorld has issued preliminary third quarter financials that reveal how the current global oversupply of PV modules is exerting downward pressure on prices.

Despite increasing shipments year-on-year by 5% – reaching 345 MW in Q3 2016 compared to 328 MW in Q3 2015 – consolidated revenue for the quarter came in below Q3 2015, reaching €204 million $223 million). Last year, that figure stood slightly higher, at €212 million ($232 million).

Extrapolated over the first three quarters of the year, 2016’s figures stack up positively against 2015, revealing a 31% increase in shipments (1,027 MW for 2016 compared to 784 MW for 2015) and a 20% increase in group revenue (€639 million for 2016 compared to €532 million for 2015).

However, the suppression in revenue evident in Q3 cannot be ignored. SolarWorld calls it a “global price erosion” resulting from “increasing dumping by Chinese manufacturers”. This has resulted in a €13 million write-down in inventories for the company, which has depressed EBITDA to €-12 million in Q3, compared to €5 million for the same quarter last year.

Over the course of the year so far, EBITDA now stands at €7 million. For the same three quarters cumulative in 2015, that figure was higher at €15 million.

SolarWorld also said in its preliminary earnings report that the current negative market environment has nurtured a build-up of inventories, forcing liquid funds to decrease to €84 million as of September 30. By way of contrast, the group had funds of €148 million at this same stage last year.

Steps have already been taken by the firm to ease its financial burdens. SolarWorld announced in September that it is to lay off 500 temporary workers in Germany, and just last week said that it will not be able to reach its 2016 revenue and EBIT forecast.

The company has been a long and vocal proponent of the EU’s Minimum Import Price (MIP) undertaking for Chinese solar suppliers, but in recent months many Tier 1 and Tier 2 Chinese companies have voluntarily withdrawn from the undertaking, preferring instead to incur the current anti-dumping tariffs that apply – a situation that seemingly highlights just how low solar module prices have fallen this year.