Sunpower’s 2Q19 net profit jumped 85 percent

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Sunpower Group reported Wednesday its second quarter net profit, excluding the impact of its convertible bonds, jumped 106.3 percent to 52.48 million yuan (S$10.38 million or US$7.47 million) on increased contributions from the Green Investment (GI) business.

Revenue for the quarter ended 30 June was 659.03 million yuan, up 10.2 percent on-year on increased revenue from the GI business, mainly from the Changrun and Yongxing projects, Sunpower said in a filing to SGX.

The GI projects are still ramping up, but are benefiting from strong tariff collections due to the ability to require pre-payments from customers, Sunpower said.

“The strong and continuous ramp-up of our seven operating GI plants has allowed us to again achieve significant growth in revenue, earnings and cashflow,” Guo Hongxin, executive chairman of Sunpower, said in the statement.

Other operating expenses more than doubled to 12.56 million yuan, from 6.16 million yuan in the year-ago quarter on a higher impairment allowance on trade and non-trade receivables, while finance costs increased 81.8 percent on-year to 29.30 million yuan on the expansion of BOT and TOT projects, the filing said.

Including the effects of the convertible bonds, Sunpower posted a second quarter net loss of 5.24 million yuan, narrower than the 81.0 million yuan loss in the year-ago quarter, on a fair value loss on the convertible bonds and warrants.

For the first half, Sunpower reported net profit excluding the impact of the convertible bonds rose 90.6 percent on-year to 111.02 million yuan, on revenue of 1.47 billion yuan, up 20.6 percent on-year. Including the effects of the convertible bonds, Sunpower posted a net loss of 46.72 million yuan for the first half, swinging from a year-ago net profit of 1.37 million yuan.

In its outlook, Sunpower said there was “much to be done” to meet the Chinese government’s pollution reduction targets.

“Such top-level official backing and stringent enforcement will continue to drive the long-term prospects of China’s environmental protection industry, particularly the anti-smog services sector that Sunpower’s GI business is targeting,” the filing said. “Barring unforeseen circumstances, Sunpower is well placed to further improve earnings growth.”

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