Sunpower's Q1 profit falls 61% due to fair value changes on convertible bonds, warrants

MAINBOARD-LISTED Sunpower Group, a provider of energy-saving and clean power solutions, on Wednesday reported profit after tax attributable to shareholders of 85.2 million yuan (S$17.6 million) for the first quarter ended March 31, a 60.9 per cent decline on the year.

Earnings per share was 10.78 fen, down from 27.62 fen.

This is mainly due to fair value changes of the group's convertible bonds and warrants. Otherwise, attributable profit would have been 59.7 million yuan, a 17 per cent increase year on year (y-o-y).

Revenue for the quarter was up 31.2 per cent at 882.9 million yuan, on improved performances from both the manufacturing and services, and green investments businesses.

In particular, revenue from the green investments segment grew 61.2 per cent y-o-y to 417.6 million yuan, mainly driven by nine projects in commercial operation, from eight projects in operation and one in trial production previously.

Manufacturing and services revenue for Q1 rose 12.5 per cent on the year to 465.2 million yuan.

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The green investments segment will become Sunpower's principal business following the group's divestment of the manufacturing and services business.

In its earnings announcement, Sunpower said it is well placed to benefit from China's support of environmentally sustainable economic growth, noting, for instance, national clean air policies that mandate the closure of coal-fired boilers, unlocking demand for clean steam, heat and electricity supplied by large, centralised plants.

The group has invested and committed 1.93 billion yuan in equity to date, to build up its green investment business. Aside from the nine projects in operation, it has two others under construction.

Sunpower said it will "intensify efforts to cultivate and enhance the quality" of its existing green investments projects, greenfield and acquired projects alike.

It will also seek suitable opportunities to expand the portfolio, either by procuring new projects with exclusive, long-term concessions or embarking on further phases of expansion for certain existing projects.

Shares of Sunpower closed up 2.41 per cent at S$0.85 on Wednesday, before the announcement.