Hanwha SolarOne Drops on China Driven First-Quarter Loss

May 14, 2014 4:51 pm ET

(Updates with closing share price in second paragraph.)

May 14 (Bloomberg) -- Hanwha SolarOne Co., the Chinese photovoltaic manufacturing unit of South Korea’s Hanwha Group, fell after reporting a first-quarter loss on lower demand in China and a weaker currency.

The company’s American depositary receipts fell 11 percent to $2.47 at the close in New York, the most since March 26. Each ADR is worth five ordinary shares.

Hanwha reported a loss of 133.4 million yuan ($21.4 million), or 24 cents an ADR, compared to a loss of 225.9 million yuan a year earlier, the Qidong, China-based unit said today in a statement. The loss widened more than six-fold from the fourth quarter.

The loss was mainly due to seasonal weakness and delayed projects in China and the devaluation of the Chinese yuan, Nam Seong-woo, Hanwha SolarOne’s chief executive officer who was appointed on Apr. 30, said in the statement. Revenue rose 2.3 percent to 1.1 billion yuan. Japan accounted for 51 percent of sales.

China, which had accounted for 16 percent of sales in the fourth quarter, wasn’t listed among countries shipped to last quarter. The yuan depreciated 2.7 percent in the quarter.

“China demand is beginning to warm,” Nam said. Stronger demand in China is expected to boost shipments 14 percent in the second quarter from the first, he said.

“A strong second half of the year is expected in this market as the government increases incentives and improves the availability of credit for select companies,” said Nam.

Hanwha reaffirmed its expectation to ship 1.5 to 1.6 gigawatts of panels this year, according to the statement.