The performance of solar module manufacturers and raw material providers was divided due to the soaring solar raw material prices. Solar module manufacturers resulted in losses in the third quarter as raw and subsidiary material prices rose as well as logistics costs. On the other hand, raw material providers improved their performance due to a surge in raw material prices. As a result, the price of solar module manufacturer, abnormally, was raised by 10-20% last month.
Solar module manufacturers Hanwha Solutions Q-cells (Hanwha Q-cells) and Hyundai Energy Solutions’ third quarter performance of the year turned to a loss compared to the previous year. Hanwha Q-cells experienced further loss in operation since the fourth quarter of last year, and Hyundai Energy Solutions was unable to avoid operating loss despite a significant increase in sales. Shinsung E&G has not yet announced its 3Q earnings, but it is expected that the deficit increased in the 2nd quarter continued. Although it recorded KRW 827.3 billion in sales in the third quarter, the operating loss turned into a loss of KRW 95.7 billion compared to the same period of the previous year. In particular, after recording an operating loss of KRW 2.4 billion in the fourth quarter of last year, the deficit increased following an operating loss of KRW 14.9 billion in the first quarter and an operating loss of KRW 64.6 billion in the second quarter.
Hyundai Energy Solutions also resulted in a loss, recording KRW 149.7 billion in sales and KRW 500 million in operating loss in the third quarter. Hyundai Energy Solutions recorded sales of KRW 78.5 billion and operating profit of KRW 4.5 billion in the third quarter of last year. Sales nearly doubled compared to the previous year, but it could not avoid the operating losses. Shinsung E&G has not yet released 3Q earnings, but it is unlikely that it will avoid operating losses. In the second quarter, the operating loss was KRW 5.4 billion, which was worse than the first quarter (KRW 1.4 billion in operating loss).
Solar module manufacturers analyzed that their performance worsened as the price of raw materials such as polysilicon and subsidiary materials such as glass and aluminum rose as well as the increase in logistics costs. As a result, solar module manufacturers raised their product prices by 10-20% last month. It is uncommon for a solar module price to increase this significantly.
On the other hand, OCI, a polysilicon manufacturer, which provides a raw material for solar power, recorded KRW 888.7 billion in sales and KRW 194.6 billion in operating profit in the third quarter of this year, up 16% and 17% from the previous quarter, respectively. Compared to the same period last year, sales increased by 90% and operating profit increased by 977%. The sales price of polysilicon for solar power increased by about 28% compared to the previous quarter, resulting in an increase in earnings. The photovoltaic industry expects that the effect of rising raw material cost will continue until the first half of next year. Won Park, head of Hanwha Q-cells ‘Strategic Support Division, said on the 3rd, "The price of solar power raw materials and subsidiary materials has risen, as well as logistics costs; thus we are experiencing ‘three major humps'. I think it (the situation) will improve after two quarters next year, but it will be a difficult situation without a (module) price increase this year or next year.
<Table> 3rd Quarter Results of Major Domestic Solar Power Companies (Unit: KRW 100 million)
Source: Collected by each company
By Staff Reporter Sang-geun Byun (sgbyun@etnews.com)