Sunpower Group Q1 net profit down by 51.8% to 41.1 million yuan

MAINBOARD-LISTED environmental engineering company Sunpower Group : 5GD 0% saw first-quarter earnings slide, after divesting its non-core manufacturing and services business in 2021, according to results released on Sunday (May 15).

Net profit fell to 41.1 million yuan (S$8.4 million) for the 3 months to Mar 31, 2022, down by 51.8 per cent year on year, even as revenue grew 74.3 per cent to 738.5 million yuan on the back of higher capacity, new projects, and an increase in the sales price of steam.

Profit from continuing operations slipped by 5.3 per cent to 49.8 million yuan, while Sunpower recorded no earnings from its discontinued operations, against 33.5 million yuan previously.

Excluding effects from fair-value change, unrealised currency translation and amortised interest costs of convertible bonds, overall net profit would have slid 62.4 per cent to 22.4 million yuan.

Sunpower, which saw steam sales volume rise by 22.6 per cent to 2.16 million tonnes in the quarter, said that it expects its business in FY2022 to be supported by ramp-up and expansion in its plants in 2022, as well as cost reductions and other business strategy decisions.

The group has 10 plants in operation and 1 more under construction. While Covid-19 outbreaks in parts of China had disrupted some projects and some customers’ operations as of late April 2022, “projects that were temporarily affected have seen a recovery in their operations” and the company is monitoring the situation, with contingency plans in place, said Sunpower.

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Ma Ming, chief executive of Sunpower, said industrial steam sales volumes are expected to remain firm in 2022, despite headwinds from the pandemic and “geopolitical issues worldwide”.

“In the longer term, the group remains in a strong position to benefit from the prospects of the centralised steam supply industry and the long-term development of industrial parks as it has a strong supplier role in the provision of clean steam, a non-discretionary production input, to industrial users,” he added in a media statement.

Earnings per share came to 5.16 fen for the quarter, compared with 10.78 fen in the year before. Net asset value was 238.81 fen a share, against 232.60 fen as at Dec 31, 2021.

No dividend was recommended, as the company does not typically do so in the first quarter.

Sunpower shares last traded at S$0.385, down by S$0.02 or 4.94 per cent, before the results.