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Trina cuts full-year shipment forecast on ongoing oversupply
Chinese solar company Trina lowered its forecast shipments for the year, after reporting its fifth consecutive quarterly loss and weaker than expected sales.
It sold 380MW for the three months to end of September, compared with a previously guided 450-480MW. Revenues dropped 38% from the same period last year to $298m and losses came in at $57.5m.
The company warned last week that its third quarter shipments had been hit by continued oversupply and the “irrational pricing practices” of some of its competitors.
"These factors contributed to declines in our average selling prices, despite cost improvements of our key materials,” says chief executive Gao Jifan.
Some solar module makers, facing a global glut in production capacity, are selling panels at rock-bottom prices to get rid of inventory, according to industry sources.
Average selling prices are already down more than 30% this year, squeezing profits across the sector and triggering job cuts at a number of top players including Trina, which has recently announced a company-wide restructuring plan, and Suntech, which last week said it was cutting 50 jobs at a plant in the US.
“Higher historical costs of our inventory also contributed to the low gross margin and net loss in the third quarter,” adds Gao.
Trina’s gross margin fell to 0.8%, compared to 8.4% in the second quarter, impacted by higher inventory carrying costs and a $13.3m inventory write-down in connection with decreasing selling prices.
It has however benefited from a reversal of a prior $25.8m provision it had made in the event of anti-dumping and countervailing duties being levied by the US on a retroactive basis.
Trina says it decreased its short-term borrowings by $44m to $689.7m as of 30 September.
The company expects to ship between 380-400MW in the fourth quarter and 1.55-1.6GW for the full year, compared to previous guidance of 1.75-1.8 GW.
Trina's production capacity is 2.4 GW.