L R AS Published on Saturday 29 August 2020 - n° 329 - Categories:company results
First Solar: mediocre 2nd quarter profit despite asset disposal
Uncertainty over the extension of the federal tax credit is prompting First Solar to sell its O&M (Operations and Maintenance) business due to increased competition and thus reduced profit margins. It is considering a possible disposal
of construction activity. The company wants to double the production of series 6 panels, for which there is strong demand.
In the second quarter of 2020, the company posted sales of $642 million (+21%, an increase due to the disposal of a project). Second quarter shipments amounted to 1.2 GW, 300 MW less than expected, while First Solar was not affected by the pandemic. The decline was due to port congestion, labour constraints and financing delays.
Production forecasts for 2020 remain at 5.9 GWp. Investments between $450 and $550 million
PV Tech of 7 August
Editor's note Despite an excellent product, First Solar is falling further and further behind its Asian competitors every year. There's no point in having a full order book if it doesn't supply its customers. There's no point in producing if you don't make a profit. This willingness to sell its assets (O&M), even if they are not very profitable at the moment, is a short-sighted decision, because the research and development policy is sacrificed under the pretext that the company does not need it at the moment given its order book. The wheel of fortune is turning. The awakening of First Solar will be dramatic.
Over the quarter, the company suffers a 60% drop in net profit to $37 million (a net margin of 5.7%), despite the disposal of an asset that is certainly profitable, compared with 17% in the first quarter of 2020. The R&D rate was 3.5% over the period, compared with 4.8% in the firstquarter.
