China’s Comtec Solar has recorded a loss of RMB129 million (US$18.2 million) for the year to the end of December 2019, with net current liabilities standing at RMB189 million, according to the newly released audited version of its full-year results. However, it insists that it remains a going concern, despite its poor performance.
The release of its audited results confirms the company’s late-January announcement of its full-year earnings for 2019, with group revenue plunging 46.1% year on year to RMB93 million. At the time, the company indicated that it was committed to slashing fixed costs, following the termination of long-term polysilicon purchase agreements, which had contributed to “substantial” losses for the group. “Given the current industry environment, it is clear that strict financial discipline is essential to success,” it said in January.
It now appears that some of these efforts to trim fat might be paying off. In a statement to the Hong Kong stock exchange this week, the solar manufacturer and lithium-ion battery storage company finally addressed lingering concerns about its future viability, given its poor performance in 2019.
“A material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern,” it acknowledged. “(But) the directors, having considered the measures being taken by the group, are of the opinion that the group would be able to continue as a going concern.’’
In early January, Chinese investor Sun Da paid nearly HK$10.5 million (US$1.35 million) for a 14.3% stake in Comtec Solar. The cash injection followed the company’s September 2019 announcement of plans to turn its back on solar manufacturing in order to focus on PV project sales, energy storage, and electric vehicles.
At the time, the company said that it would consider offers for its production facilities in Shanghai and China’s Jiangsu province. However, it still has yet to reveal whether it has found a buyer for the factories.
Comtec Solar said it aims to release its annual report by the end of this month.