China Sunergy Co., Ltd. (NASDAQ:CSUN) has posted relatively better results for its third quarter that witnessed falling sales – but better margins – as, unlike JA Solar Holdings Co., Ltd. (ADR)(NASDAQ:JASO) and Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE), it has significantly narrowed its quarterly loss. Shipments stood at 82.5MW, which shows a 45% sequential and 29% year-on-year decline, though is in line with its guidance of 80MW–85MW. This has caused the revenues to slide by 46% sequentially and 59.2% YoY to $59.5M. However, gross margins have improved from -0.3% in the second quarter to 0.7% in the third, which also shows a 14.4% YoY increase. Net losses were reduced from more than $30M in Q2-2012 and Q3-2011 to the present loss of $23.2M, which translates into a loss per share of $1.74.
The ASPs have continued to fall by 5.3% from the previous quarter to $0.71 per watt. Meanwhile, the module and cell conversion costs have fallen by 14.8% and 26% to $0.23/W and $0.17/W, respectively. CSUN plans to further reduce the costs in the next quarter to $0.21 and $0.16 for module and cells.
Commenting on the results, the company’s CEO Stephen Cai has said, "We believe that the quarter marked a turning point for CSUN, as we continued diversifying our end markets, forming new partnerships with strong customers, and gradually transforming ourselves from a pure manufacturer to a downstream solar solutions provider."
The business is diversifying its customer base with their share of the Australian market growing to 26%, making it bigger than Italy and Germany, who contributed 17% and 15% to the total revenues. During this quarter, CSUN was awarded a 7.8MW contract with the Australia-based Urban Group and a 50MW partnership deal with the Bulgarian developer V2M, and entered the Dubai market by shipping 72kW multi-crystalline solar modules to Carillion Construction.
For the fourth quarter, CSUN expects to ship 90MW-100MW, while its gross margin will improve to a “low single-digit” number and it will post a net loss. For the fiscal 2012, it has restated its 400MW – 420MW forecast. The business expects the demand to remain weak for at least the first half of the next year. In its third quarter, the business has spent $7.6 million on the revamp of its R&D center, which is expected to be finished by Q1-2013.
In the fourth quarter, it has signed a 1.65MW contract with INFiNI in Japan, as annual shipments to the country exceeded 6.7MW. It has also signed a 7MW supply contract with Netherlands-based Oskomera Solar Power Solutions for rooftop monocrystalline solar modules. Moreover, it has started working on the 10MW UK solar parks project, which will be developed as well as operated by CSUN. To avoid the potential EU anti-dumping tariffs, the company has shifted its 100MW production plant from Shanghai, China, to Istanbul, Turkey, and production is expected to start as early as next month.
