April 18 |
April 18 (Reuters) – Chinese solar panel maker LDK Solar Co Ltd, which partially defaulted on a bond payment this week, reported on Thursday its seventh straight quarterly loss as it struggles to meet looming debt payments of more than $ 3 billion.
The company said it would focus on emerging solar markets in China, Africa, India and the United States, but warned that demand for solar panels would remain weak in the near term.
Like many of its domestic rivals, LDK ran up huge debts to expand manufacturing capacity before being hit by the euro zone crisis that triggered a collapse in demand for solar panels.
It must repay two-thirds of its outstanding debt in about a year, according to analysts’ estimates. The company’s free cash flow – cash generated from operations after subtracting capital expenditure – has been negative since it was established in 2005, Thomson Reuters data showed.
LDK’s net loss hit $ 517 million or $ 3.68 per American Depositary Share (ADS) in the fourth quarter compared with $ 588.7 million or $ 4.63 per ADS a year earlier, the company said on Thursday.
LDK partially defaulted on a $ 24 million bond payment that was due on Monday, citing a “temporary cash-flow shortage”.
Bigger rival Suntech Power Holdings Co Ltd’s main unit in China was pushed into insolvency after it defaulted on $ 541 million in bonds due March 15, though the company struck a deal with 60 percent of the noteholders.
LDK has recently struck deals with the government of its home city, but analysts question whether the firm can rely on the Chinese government’s backing. China’s State Council, the country’s cabinet, last December indicated that it would stop propping up loss-making solar companies.
LDK Solar expects its revenue to reach $ 80-100 million in the first quarter, with wafer shipments reaching 260-270 megawatts (MW) and cell and module shipments at 30-40 MW. In the fourth quarter, LDK shipped 184.7 MW of wafers and 69.1 MW of modules.
Rival Yingli Green Energy Holding Co increased its merchant shipment volumes by 43 percent, according to data compiled by business information provider IHS.
LDK’s net sales fell to $ 135.9 million from $ 420.2 million a year earlier.
Its shares were down 75 percent from the start of 2012 as of Wednesday’s close of $ 1.08 on the New York Stock Exchange.
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UPDATE 1-Indebted China solar panel maker LDK posts 7th straight quarterly loss
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