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China

China

Mixed fortunes for Chinese turbine manufacturers

CHINA: The half year results for China's turbine manufacturers revealed some companies appearing to turn the corner, while others are still struggling to overcome difficult market conditions.

Goldwind prospered while others struggled
Goldwind prospered while others struggled

Sinovel showed little sign of turning around its fortunes, with the company reporting a first-half loss of CNY 457.9 million ($75 million) after securing a net profit of CNY 11.2 million a year earlier. This came on the back of a 55% fall in sales to CNY 1.39 billion.

Trading has been impaired by a probe into possible violations of stock-market rules, which the company said has hurt its ability to collect payments and add business.

The country's biggest turbine manufacturer, Goldwind, had a much brighter first half, with net profit up to CNY 92.7 million from CNY 72.1 million in the first half of 2012.

The company has been engaged in an extensive cost-cutting programme to counter the contraction of its markets, and as such managed to extend its profits despite a 6.5% drop in revenue to CNY 3.2 billion.

Deliveries for international projects climbed to a record 162.50MW.

Ming Yang, on the other hand, saw its losses widen in the second quarter to CNY 63 million compared with CNY 30.2 million last year.

The company only made sales of 161MW during the period, a decrease of 19% compared with the previous year.

And while Goldwind was widening its margin, Ming Yang saw its gross margin contract to 12.3% from 14.5%, largely due to a fall in the average selling price of its turbines.

China is predicted to construct 13GW in 2013, less than last year, but some observers are tipping the market to start its recovery soon.

The market was swamped when manufacturers looked to take advantage of the country's rush to wind power, but the lack of connections to the grid meant the brakes were put on development.

But this appears to be easing, with the proportion of idle wind turbines expected to fall from 2012's figure of 17% of those installed to 12% for 2013.

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