Solar panel equipment maker Meyer Burger feels bite of Chinese subsidies cut

The figures confirm Meyer Burger’s preliminary results announcement on July 19, but add a renewed restructuring programme that the company hopes will keep its costs in check

ZURICH: Shares in solar panel machinery maker Meyer Burger fell on Thursday, as dwindling orders at the Swiss company amid falling Chinese solar subsidies soured investors and forced it to trim its full-year sales outlook.

The figures confirm Meyer Burger’s preliminary results announcement on July 19, but add a renewed restructuring programme that the company hopes will keep its costs in check.

Its shares were down 3.4 percent at 0840 GMT, having lost two-thirds of their value this year. It posted a net profit of 8.3 million Swiss francs ($8.35 million), compared to last year’s 17 million franc loss in the period.

China, a main global market for solar power, in June slashed industry subsidies to curb capacity growth and ease its financial burden, a move that will weigh on equipment makers like Meyer Burger, analysts have said.

Meyer Burger, whose machines and technology are used to make photovoltaic (PV) panels, blamed a “challenging market environment” for orders that at 137.9 million Swiss francs were less than half the 308.5 million francs of the 2017 period.

With a backlog of only 241 million francs, down from 339 million this time last year, the Thun-based company trimmed its full-year sales outlook to 400-440 million francs from 450-500 million previously.

Details for the restructuring programme are due in coming weeks, Meyer Burger said, adding it hopes to cut its break-even sales level to just 300 million francs.

“The measures aim to further increase customer proximity, optimise the global production footprint and increase the company’s robustness against market volatilities,” the company said in its statement.

Analysts said not only Chinese subsidy reductions but also the ongoing trade dispute between the U.S. and China are biting.

“Over the past few months, trade tensions between the U.S. and China, coupled with the solar subsidies cut announced by the Chinese government, have led Meyer Burger’s clients to a temporary strong reluctance regarding new PV-related investment,” wrote UBS’s Alessandro Taiana, who has a “neutral” rating. ($1 = 0.9936 Swiss francs)

Source: reuters