LDK unveils more job cuts, slashes revenue forecast
(Reuters) - China-based LDK Solar Co Ltd (LDK.N) slashed its revenue forecast for the year and disclosed that it had laid off more than 2,500 employees in the third quarter as high U.S. import duties and weak prices dent shipments of solar cells and panels.
LDK, which had previously cut about 9,000 jobs this year, had 13,958 employees at the end of the quarter. The employee count was down 2,563 from the end of the second quarter, Chief Financial Officer Jack Lai said on a call with analysts.
Margins have vanished at LDK and its rivals as a result of a near 75 percent drop in panel prices in the last four years brought on by a drastic drop in demand in No.1 solar market Europe coupled with rapid capacity expansion.
Like its peers, LDK has been cutting costs to arrest the fall in margins. The company reported its sixth quarterly loss on Monday after an inventory writedown of $37.8 million.
Trina Solar Ltd (TSL.N) said last month that it had reduced headcount during the quarter, joining No.1 panel maker Suntech Power Holdings STP.N, SunPower Corp (SPWR.O) and LDK Solar.
LDK is considering financing options including attracting strategic investors to meet its refinancing schedule, Chief Executive Xingxue Tong said.
LDK said it has $2.5 billion in debt maturing over the next 12 to 18 months, with about $500 million due over the next couple of quarters.
The company, which has been in talks with investors to shore up its balance sheet, said it was in talks with a party from North America and two or three Chinese corporations.
"No clear offer has been put on the table yet, but we are carrying on these discussions," an executive said on the call.
LDK, which has one of the most stretched balance sheets in the industry, has been sued by Shanghai Rural Commercial Bank for overdue loans worth 100 million yuan, Bloomberg reported last week, citing the Economic Information Daily. (link.reuters.com/vud44t)
LDK sold a 19.9 stake to state-backed Heng Rui Xin Energy in October. The government of Xinyu city in Jiangxi province said in July it would repay some loans of the company, which is based in the city.
The company ended the third quarter with $111.9 million in cash and cash equivalents and $340.7 million in short-term pledged bank deposits.
To add to its troubles, LDK has been slapped with countervailing duties of 15.24 percent and anti-dumping duties of 25.96 percent on its panels and cells in the United States. Europe could impose similar duties on Chinese solar imports.
LDK cut its full-year revenue forecast for the second time in as many quarters to between $950 million and $1 billion, from a range of $1.1 billion to $1.5 billion.
The company, which makes polysilicon, solar wafers, cells and modules, expects fourth-quarter revenue of $230 million to $290 million. Analysts on average have been expecting $552.35 million, according to Thomson Reuters I/B/E/S.
LDK expects to ship between 50 MW (megawatts) and 80 MW of cells and modules in the fourth quarter, compared with third-quarter shipments of 161.9 MW.
The company forecast current-quarter wafer shipments of 200 MW to 250 MW, compared with the 230.2 MW in the third quarter.
LDK also cut the upper end of its full-year wafer shipment forecast to 960 MW from 1.2 gigawatts, and its cell and module shipment outlook to 530 MW from 750 MW.
LDK's net loss widened to $136.9 million, or $1.08 per American depository share (ADS), in the third quarter, from $114.5 million, or 87 cents per ADS, a year earlier. Net sales halved to $291.5 million.
LDK shares were down 9.5 percent at $1.05 in morning trading on Monday on the New York Stock Exchange.
The stock, listed in 2007, has fallen 72 percent this year. LDK received a delisting warning from the exchange last month.
(Reporting by Swetha Gopinath in Bangalore)
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