Hong Kong-based solar manufacturer Shunfeng International Clean Energy – which suffered a $125 million loss during the Chinese solar boom in 2017 – has warned shareholders to brace themselves for losses of $255 million from last year.
The anticipated result is based on the company’s preliminary review of its unaudited results for 2018. The Hong Kong-listed group said a 16.8% year-on-year jump in sales of its solar equipment was offset by a 12.6% decline in the average selling price of products. Shunfeng described competition in the PV market as “intense”.
“The board resolved to recognize a provision for impairment of approximately RMB777.7 million [$116 million] for the property, plant and equipment and the goodwill of the solar products manufacturing segment,” Shunfeng said in a statement to the Hong Kong Stock Exchange.
The PV manufacturer and project developer added solar panel production unit Wuxi Suntech Power will probably not bring in enough taxable income over the near term. The parent will therefore recognize a reversal of deferred income tax assets of about $11 million for the year.
In September, Shunfeng reported a hefty net loss of around $172 million for the first half of 2018. Sales of its PV products throughout the first six months reached approximately 1.9 GW, said the company. Shunfeng followed its dismal earnings announcement by signalling plans to sell manufacturing subsidiary Jiangsu Shunfeng Photovoltaic Technology to Asia Pacific Resources Development Investment.