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Sinovel confirms 2014 profit

CHINA: Troubled turbine maker Sinovel managed to hit a net profit of CNY 80.73 million in 2014, after two years of losses.

Sinovel's 6MW turbine
Sinovel's 6MW turbine
The positive results were achieved mainly through transferring part of the debts owed to it to two companies, collecting debts from some clients at lower than surface values, and gaining debt forgiveness from a couple of suppliers.

The company announced earlier in the year it had managed to go into profit although the figures required independent verification.

Sinovel reported negative net profits for 2012 and 2013. The listed company was warned in May 2014 by the Shanghai Stock Exchange (SSE) of the possibility of being delisted on the stock market if it recorded negative results for another year. In the same month, SSE suspended trading of two Sinovel bonds.

The firm said it has now applied to SSE to lift the delist warning and for the resumption of trading of the bonds.

In accordance with SSE regulations, rulings about the warning and bonds will come within five and 15 work days respectively upon receiving the applications. Trading of the Sinovel shares, now designated "STRuidian", will not be suspended.

Sinovel also released the 2015 Q1 report, which showed net profits of CNY 248 million, down 44.85% on the same period in 2014.

The annual report acknowledged that the past year had been very difficult for the company, as it failed to win any new contracts and the execution of orders had been slow.

Currently the firm faces a shortage of funds, which in Sinovel's words is likely to "seriously impact" future operations and the settlement of a host of arbitration cases and lawsuits it is entangled in.

By the end of 2014 Sinovel had 2.49GW contracted orders awaiting delivery. Other orders totalling 8.86GW were yet to be signed, more than 57% of which were for 3MW or larger turbines, the annual report said.

The company's strength lies in the development of large wind turbines. It is seeking certifications of its 5MW and 6MW offshore turbines by domestic and international institutions. And it has completed a research project sponsored by the Ministry of Science & Technology for the design of a 10MW offshore turbine.

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