Solar cells manufacturer Solarfun Power Holdings Co., Ltd. (SOLF) Wednesday reported a profit for the third quarter, as compared to a loss last year, despite a sharp decrease in revenues. Solarfun shares are currently trading up more than 5% on the Nasdaq.
For the third quarter, net income attributable to shareholders was RMB 136.62 million, US$20.02 million, compared with a loss of RMB 44.31 million in the prior-year period. On a per share basis, attributable earnings were RMB 0.51 or US$0.07 versus a loss of RMB 0.17 last year. Net income per American depositary shares, or ADS, was US$0.37 or RMB 2.53 compared with a loss per ADS of RMB 0.86 in the year-ago period.
The Qidong, China-based company's net revenues for the quarter dropped 22.6% to RMB 986.80 million, or US$144.56 million, from RMB 1.27 billion in the third quarter of fiscal 2008.
Revenues from photovoltaic modules were US$117.53 million or RMB 802.31 million versus RMB 1.15 billion, and revenues from photovoltaic cells plunged to US$2.09 million or RMB 14.25 million from RMB 90.92 million. However, other revenues for the period surged to US$24.94 million or RMB 170.24 million from RMB 37.03 million in the 2008-year period.
Reflecting lower raw material costs primarily as a result of renegotiated supply agreements and increased spot market purchases, gross profit for the quarter was RMB 204.4 million, or US$29.9 million, compared to RMB 46.1 million in the third quarter of 2008. Vertical integration to the ingot and wafer level also led to reduced costs from higher utilization and continued process improvements, the company said.
During the three-month period, interest expenses incurred by Solarfun were US$6.0 million or RMB 40.8 million, an increase from RMB 21.6 million in the prior year. Write down of inventories for the period was US$10.54 million or RMB 71.97 million versus RMB 88.16 million a year ago. Total operating costs incurred by the company rose to US$10.99 million or RMB 75.02 million from RMB 72.00 million in the previous year.
In the third quarter, PV module shipments reached 102.6 MW, up from 41.8 MW in the corresponding period prior year. Excluding module processing, Solarfun recorded greater geographic diversity in its sales, with Germany accounting for 60% of the company's total PV module shipments.
Excluding module processing services, average selling price slipped to US$2.03 per watt from US$2.66 per watt in the second quarter of 2009, reflecting decrease in market prices of PV products.
Commenting on the results, president Peter Xie said, "Of particular note were quarterly shipment volumes exceeding 100 MW for the first time in the Company's history, gross margins reaching 20%, and a return to profitability."
At the end of the third quarter, under equity distribution agreement entered into with Morgan Stanley & Co. Incorporated in September 2009, Solarfun sold 1.96 million ADSs, raising US$12.5 million in gross proceeds, of which US$0.3 million was paid to Morgan Stanley & Co. as manager for the sale.
As of November 18, 2009, Solarfun has raised a total of US$23.1 million in gross proceeds from sale of 3.89 million ADSs, out of which US$0.6 million was paid to Morgan Stanley & Co. as manager for the sale.
Looking ahead to the fourth quarter of 2009, Solarfun expects shipments to be nearly 110 MW, with module processing services accounting for around 20% of total shipments. Average selling prices are estimated to fall by about 5% from the previous quarter, in constant currency.
For the first quarter of fiscal 2010, the company said it anticipates to see continuing good demand, with prices declining slightly from levels in the fourth quarter of 2009.
"The preliminary shipment target for 2010 is 500 MW. We expect strong demand from Germany as project development is accelerated in response to expected feed-in-tariff reductions, from new markets like China and the United States, and as the general availability of funding for solar projects improves," Xie added.
In Wednesday's regular trading session, SOLF is currently trading on the Nasdaq at US$6.38 per share up US$0.55 or 9.43% on a volume of 2.20 million shares. In the past 52-week period, the shares have been trading in a range of US$2.27 to US$8.95.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.