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Turbine overcapacity drives Sinovel Q3 profits down 49%

Sinovel adds that "macroeconomic cyclical fluctuations as well as delays to some project approvals impacted sales revenues and also caused a relatively large increase in management costs". Management costs went up 78% to 288m yuan.

Profits at China's top wind turbine maker Sinovel fell by 49% in the third quarter as overcapacity in the industry kept up pressure on prices and margins.

Sinovel's net profit dropped to 242m yuan ($38m) for the quarter.

Overall, net profit for the first nine months of the year is down 48.5% to 900.7m yuan, mainly due to fierce market competition eroding sales prices and reducing sales income and profit margins.

Sinovel adds that "macroeconomic cyclical fluctuations as well as delays to some project approvals impacted sales revenues and also caused a relatively large increase in management costs".

Management costs went up 78% to 288m yuan.

Chinese wind-turbine prices have declined by around 20% for each of the past three years and sell for around half the price of a machine sold in Europe. Companies have come under further pressure this year after grid companies temporarily halted new connections amidst a review of turbine quality.

The country's second largest equipment maker, Goldwind, reported a 60% drop in profits for the first nine months to 615m yuan.

The situation is impacting cash flow at the Chinese companies, with Sinovel reporting that cash from... more [truncated due to possible copyright]  

Profits at China's top wind turbine maker Sinovel fell by 49% in the third quarter as overcapacity in the industry kept up pressure on prices and margins.

Sinovel's net profit dropped to 242m yuan ($38m) for the quarter.

Overall, net profit for the first nine months of the year is down 48.5% to 900.7m yuan, mainly due to fierce market competition eroding sales prices and reducing sales income and profit margins.

Sinovel adds that "macroeconomic cyclical fluctuations as well as delays to some project approvals impacted sales revenues and also caused a relatively large increase in management costs".

Management costs went up 78% to 288m yuan.

Chinese wind-turbine prices have declined by around 20% for each of the past three years and sell for around half the price of a machine sold in Europe. Companies have come under further pressure this year after grid companies temporarily halted new connections amidst a review of turbine quality.

The country's second largest equipment maker, Goldwind, reported a 60% drop in profits for the first nine months to 615m yuan.

The situation is impacting cash flow at the Chinese companies, with Sinovel reporting that cash from operating activities is now negative 4bn, down from 386m at the same point last year, mainly because of the decline in sales revenues.

Both Sinovel and Goldwind are planning to sell bonds to boost working capital.


Source: http://www.rechargenews.com...

NOV 1 2011
http://www.windaction.org/posts/32364-turbine-overcapacity-drives-sinovel-q3-profits-down-49
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