Hanwha Solutions posts 28.7% drop in operating profit

Hanwha Solutions posted a 28.7 percent drop in operating profit to 194.1 billion won ($152.6 million) in the second quarter, missing the analyst forecast of 246.1 billion won compiled by FnGuide.

Hanwha Q Cells' solar plant in Georgia [HANWHA SOLUTIONS]

Hanwha Solutions posted a weaker-than-expected operating profit of 194.1 billion won ($152.6 million) in the second quarter, down 28.7 percent on year, due to a decline in solar module prices.

The figure missed the analyst forecast of 246.1 billion won compiled by FnGuide.

The estimated 27.9 billion won solar energy tax credit from the U.S. Inflation Reduction Act (IRA) program was calculated into the operating profit.

Revenue rose 4.1 percent to 3.39 trillion won, above the market consensus.

Net profit plunged 80.6 percent to 47.5 billion won due to equity losses from its consolidated subsidiaries, according to the company.

Hanwha Solutions said the weaker-than-expected performance was due to a fall in solar module prices.

“The decline in the solar module price was incorporated into the performance faster than the decline in raw material costs of wafers was, which pushed the operating profit down to below the previously expected level,” Hanwha Solutions said in a release Thursday.

The company expects profitability will improve in the latter half of the year as the decrease in wafer costs drives up margins.

Hanwha Solutions’ solar segment, or Hanwha Q Cells, accounted for 71 percent of the operating profit with 138 billion won, a 292 percent jump from the same period last year.

Meanwhile, its chemical business saw a 79 percent drop in operating profit to 6.9 billion won due to lagging petrochemicals demand.

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