GCL-Poly warns of enormous net loss for 2020

• Major polysilicon and wafer manufacturer GCL-Poly Energy Holdings anticipates to report a bottom line for 2020 not less than RMB5.8 billion (US$ 891 million).

The bottom line warning is the largest GCL-Poly has actually revealed, dwarfing losses made in 2013 and 2018.

GCL-Poly Group had reported a net loss in the first fifty percent of 2020 of RMB1,924 million (US$ 281.8 million), with its essential Solar Material business system (polysilicon and also wafers) making losses of RMB2,023 million (US$ 296.2 million).

These first half year losses were attributed to a 51.1% decline in actual silicon rod production as the firm threw away a 31.5% equity passion in Xinjiang GCL polysilicon plant with a nameplate ability of around 50,000 MT in 2019. The Xinjiang plant likewise endured a significant case while under yearly maintenance during this duration.

The company was also affected by COVID-19 with weak demand in the first half of the year, causing rapidly falling polysilicon typical asking price (ASPs), which was up to US$ 7.56/ kg in that coverage duration, below US$ 9.01/ kg in the previous year duration. Wafer ASPs adhered to a comparable down path.

Although GCL-Poly had kept in mind the beginning of a rebound in polysilicon ASPs at the end of the first fifty percent 2020 reporting period, the business was favorable on the polysilicon company unit returning to profitability in the second fifty percent of the year.

Based on GCL-Poly's profit warning, 2nd fifty percent year net losses increased to not less than US$ 596 million, nevertheless the company did not give understanding right into a lucrative position for the Solar Material company unit overall.

The sale of the Xinjiang GCL polysilicon plant in 2019 improved GCL-Poly's annual report by RMB4.4 billion (USUS$ 676 million), causing an extremely tiny web revenue for the year of around RMB110 million (US$ 17 million).

GCL-Poly claimed that its full-year 2020 anticipated bottom lines were partially attributable to the sale of Xinjiang GCL in 2019, due to the absence of the Xinjiang GCL disposal gain in its 2020 fiscal year.

The firm also noted that the expected net losses were partly attributable to disability arrangement on assets, while the predicted increase in the net loss was partially countered by the exchange gain brought on by the depreciation of the USD against the RMB for USD denominated bankruptcy.