Hanwha Solutions Q3 net profit down 28.4 percent on year

Hanwha's office building in Jung District, central Seoul [NEWS1]

Hanwha Solutions logged a net profit of 138.6 billion won ($97.4 million) for the third quarter, down 28.4 percent on year.

The figure fell short of the market expectation of 182.5 billion won compiled by FnGuide.

Operating profit jumped 95.3 percent to a record 348.4 billion won, beating the expectation of 273.4 billion won. Its sales came to 3.36 trillion won, up 30.4 percent on year but still missing the forecast of 3.40 trillion won.

Robust solar panel demand in the United States and European regions drove operating profit up to a record level, according to the company.

For the lower-than-expected earnings, however, Hanwha Solutions cited the equity losses from affiliated companies affected by the sluggish petrochemicals demand through the July-September period.

The solar business accounted for 56.6 percent of the operating profit with 197.2 billion won, a turnaround from the loss of 95.7 billion won in the same period a year earlier. The sales also soared 61 percent on year to 1.33 trillion won.

“Solar module prices have been on the rise due to market expansion in both household and commercial sectors,” said Shin Yong-in, Hanwha Solutions chief finance officer, during a conference call Thursday. “And international freight rates have become stabilized in the latter half of this year, pushing up the margin rate significantly.”

The profit margin of renewable business was 14.8 percent in the third quarter, compared to the previous quarter’s 2.9 percent.

Hanwha Solutions’ renewable energy business marked a turnaround in operating profit in the April-June period, after being in the red for six consecutive quarters.

The strong solar demand is expected to continue well into the remainder of the year, said the company.

Meanwhile, its chemical business saw a 55-percent drop in operating profit to 119.7 billion won, due to lagging petrochemicals demand, accounting for 34.3 percent of the total.

Hanwha Solutions, a leading company in the United States in terms of solar cell market share, is pushing to strengthen its foothold in the country following the passing of the Inflation Reduction Act (IRA) in August.

Under the IRA, the tax credit for solar is increased and domestically made cells get a tax credit 10 percentage points higher than imported cells.

Hanwha Solutions is running a 1.7-gigawatt solar module factory in Georgia, and it plans to invest 200 billion won in the plant next year to expand production capacity by 1.4 gigawatts to 3.1 gigawatts.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]