South Korea’s Hanwha Chemical Corp. would deliver better income and balance statement this year with its solar module business that makes up about 40 percent of its total revenue estimated to have delivered a profit in the first quarter of this year, according to its chief financial officer (CFO) Yoo Young-in.

Declining to confirm the figures, Yoo in an interview with the Maeil Business Newspaper said the photovoltaic business swung to the black in the first quarter thanks to a rise in the price of polysilicon from the fourth quarter of last year and cost-cutting efforts.

The petrochemical firm, which also runs solar energy business, has raked in a record-high operating profit of 779.2 billion won ($687.4 million) last year, up a whopping 131 percent from 2015. Such stellar earnings were driven by brisk sales of its mainstay petrochemical products such as polyethylene (PE), polyvinyl chloride (PVC), chlor-alkali (CA) and toluene diisocyanate (TDI) that booked a combined record-high operating profit of 471 billion won.

The solar module business struggled in the latter half of last year, wrapping up the last three months of 2016 with an operating loss of 31.6 billion won. Its photovoltaic (PV) business made up 42.4 percent, or 3.9 trillion won, of its full-year 2016 sales of 9.2 trillion won, and the division’s poor performance has put a cap on the company’s stock growth this year, according to market analysts.

Hanwha Chemical’s shares have been trading at a tepid pace, closing down 0.8 percent at 25,200 won apiece Friday from the Jan. 2 session when its stock finished at 25,400 won. As of 2:52 p.m. Monday, shares of Hanwha Chemical traded at 25,350 won, inching up 0.6 percent from the Friday’s closing.

Main reason that has taken a big toll on its solar business was U.S. President Donald Trump’s earlier pledge to support the coal industry over renewable energy sector. The prices of polysilicon - a core material for solar cells - and solar modules have been on a downward spiral throughout the latter half of 2016, weighing on Hanwha Chemical’s solar energy business.

But the price of polysilicon has picked up in the first three months of this year. “I have no doubt that our solar business that accounts for 40 percent of total sales has turned around in the first quarter and profits in petrochemical business has further risen,” said Yoo. “On the back of improvement in both earnings and financial health, this year’s operating profit will like increase from last year.”

Hanwha Chemical made a foray into the solar energy business by acquiring China-based manufacturer of solar cells and modules Solarfun Power Holdings - renamed into Hanwha SolarOne Co. - in August 2010. It also acquired Germany-based PV cell and module manufacturer Q Cells Co. two years later.

With the two companies under its umbrella, Hanwha Chemical has secured a comprehensive solar business system on which it produces polysilicon, a key material for solar cells, and the two others produce silicon ingots, wafers and photovoltaic cells and modules.

By Moon Il-ho

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