Solarfun Swings To 2Q Loss On Provisions For Supplier Payments

   DOW JONES NEWSWIRES 
 

Solarfun Power Holdings Co. Ltd. (SOLF) swung to a second-quarter loss, hurt by sharply lower prices and a provision for a supplier agreement.

The solar industry struggled late last year and early this year amid slumping demand and tight credit. While the sector stands to benefit from favorable government policies in the U.S. and China, oversupply remains the near-term issue.

Solarfun President Peter Xie in May said the company thought the first quarter would prove to be the low point for demand and was cautiously optimistic for a second-half rebound. On Tuesday, he said demand "appears to be improving in the second half of the year."

The company's ADSs were up 4.4% at $6.60 in recent premarket trading.

The Chinese solar module and cell maker reported a loss of CNY319.9 million ($46.8 million), or CNY5.95 (87 cents) a share, compared with a prior-year profit of CNY78.1 million, or CNY1.36 a share.

The latest period included CNY236.5 million in provisions related to prepayments on supply agreements that the company has deemed not in its "best long-term economic interest" in view of prevailing market prices. Excluding items, earnings were CNY0.55 a share (8 cents).

Revenue decreased 37% to CNY854.6 million ($125.1 million).

Analysts polled by Thomson Reuters most recently were looking for a loss of 4 cents on revenue of $117 million.

The amounts reported are translated to dollars based on the exchange rate as of June 30.

Shipments rose 49% from a year earlier, and were up 80% from the first quarter. Average selling prices declined 4.3% from the prior quarter.

The company expects shipments of 100 megawatts in the thrid quarter, and 80 megawatts in the fourth quarter. It also predicted average selling prices would decline further.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; [e-mail]