SOLAR PANELS EARNINGS –Solartron struggles with sales slowdown

On September 09, 2007 in Solar News

http://www.bangkokpost.com/Business/10Sep2007_biz28.php

Monday September 10, 2007

     “SOLAR PANELS EARNINGS

Solartron struggles with sales slowdown

ARANEE JAIIMSIN

Solartron Plc, a SET-listed solar module assembler, will struggle to break even in the current poor investment climate, says chief executive Akaradej Rojmeta.

The company expects to report lower sales compared to last year, which stood at 1.11 billion baht. He hopes the upcoming quarter will sell enough for the company to break even this year.

Solartron attributes the poor performance to a generally slow economy.

”This year, we have not had orders from any big projects after the Solar Home Project, run by Solartron for the Provincial Electricity Authority, that was finished a year ago,” he said.

The Solar Home Project contributed 98% of the company’s overall income last year.

Mr Akaradej added the economic slowdown and unattractive Renewable Portfolio Standard (RPS) policies by the Energy Ministry had also delayed investments in solar power projects. He urged government assistance for the industry, and encouraged authorities to raise prices above eight baht per unit.

”We hope the new government will introduce policies to help improve the solar power generators’ balance sheets,” said Mr Akaradej.

Solartron is now reviewing its strategic plan that is scheduled to start in 2008. It expects to cut production costs by 10%-20% next year when its 1.1-billion-baht solar cell factory starts operations. It will also focus on private-sector rather than public-sector sales. This year, it expects to see private clients generate at least half of total revenues.

The company will also focus on the export market, particularly southern European markets where new solar power plants are being built. Even though exports would generate lower profit margins than domestic sales, Solartron aims to raise the ratio of export revenue to 75% next year, from only 2% in 2006.

The company plans to apply for the European industrial product standard and expects to win certification by the end of this year, said Mr Akaradej.

At present, Solartron is negotiating with a number of potential clients in Europe for sales of units totalling 20 megawatts of solar cells next year.

Korea is another possible market as the Korean government is seeking to build new solar power plants in the near future, said Mr Akaradej.

Solartron shares closed on Friday on the Stock Exchange of Thailand at 2.80 baht, down six satang, in trade worth 5.38 million baht.”

It is unfortunate to see a business stagnate due to lack of investment. However, Solartron seems to be forced to re-evaluate their plans for the future, and perhaps they will come out better in the end? If they are able to cut costs as projected, and will be increasing exports from 2% to 75%, perhaps it will bring the price of solar cells in general down.

Any thoughts?

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