30 April 2012 LDK Solar Co. Xinyu City (China) Ltd. announced as expected financial results not audited for the fourth quarter of 2011, reporting sales net of $ 420 million, an operating loss of $531 million, and a net loss of $ 589 million.
These quarterly results represent a decrease of 11% in revenue and nearly seven times greater in operating losses in the third quarter of 2011. The company also expected a sharp decline in shipments with the fall of income of USD 190 to 230 million in the first quarter of 2012, but predicts that shipments will be recovered in the coming quarters and that revenue will reach the USD 2.0 to 2.7 billion for the full year 2012.
LDK Solar "solar industry experienced a tremendous range and the unbalance of the demand throughout the chain of value during the fourth quarter," stated President and director general Peng Xiaofeng. "Our results reflect the negative effects of this disturbance in the photovoltaic market".
"Weak demand in the market and the rapid decline of average selling prices reduces our income and our margins negatively impacted in the quarter." In 2012, we hope that excess capacity and increased political uncertainty and the United States.UU. "this will lead to continued intense competition within the solar industry".
Collapse of prices drives depreciation of stocks
Fourth quarter 2011 results LDK include depreciation of stocks and supplies for firm commitment purchase of $233 million, and a provision for accounts receivable for doubtful debts and payments of US $ 179 million.
The company claims that these depreciations and provisions for the purchase commitment is required as a result of "significant" decrease in the prices of polysilicon and wafers and modules in the fourth quarter of 2011. LDK more cited a "deterioration in the solar market" in its provision for doubtful receivables and payments on account.
Both the wafer and polysilicon prices fell heavily in the fourth quarter of 2011, what has impacted the results of a number of other companies in this space. Due to the continuous and heavy losses of its production of wafers, REC ASA (Sandvika, Norway) has recently announced that it will close its last production of wafers in Norway Center.
LDK maintains a broad access to capital
LDK notes that ended the fourth quarter of 2011, with 244 million dollars in cash and equivalents cash and USD 565 million in short-term bank deposits promised.
Like other large Chinese manufacturers, LDK has access to huge amounts of capital through Chinese State-owned banks, including a line of credit of $8900 million to the China Development Bank (Beijing, China) made available in 2010.