LONGi profits increase despite ‘moderate’ capacity utilisation rate adjustments in H1

LONGi Solar recorded a 21% leap in net profit in the first half of the year despite what it described as a “moderate” adjustment to capacity utilisation rates in the wake of market demand.
The ‘Solar Module Super League’ (SMSL) manufacturer reported total module shipments in the first half of the year of 17GW, but said it had adjusted the capacity utilisation rate of its facility and adapted total output in order to meet much-discussed market demand.
As upstream raw material and component pricing – along with shipping and logistic costs – has soared since the start of the year, end market demand has contracted somewhat with many developers reporting project pushbacks in anticipation of normalised pricing. However recent weeks have seen costs increase slightly once more, with demand expected to rebound from September onwards.
Reporting its H1 2021 results today, LONGi said downstream demand remained “under pressure”, causing the SMSL member to respond by adjusting its output.
Demand upstream, however, remained strong, with the sale of solar wafers increasing by 36.5% year-on-year to 38.36GW, around 18.8GW of which was for external clients. Earlier this month LONGi confirmed an increase in the price of its wafers as pricing volatility continued into Q3.
Total group revenues meanwhile rose by 75% year-on-year to RMB35 billion (US$5.4 billion), while total gross margin stood at 22.73%, an increase on that reported in H1 2020.
Overseas sales accounted for almost half of its sales in the first half of the year.
Net profit attributable to shareholders rose by 21% year-on-year to just under RMB5 billion (US$773 million).