South Korea’s leading polysilicon supplier OCI Co. has returned to profit in 2016 in four years, but its outlook for 2017 is not so bright amid growing concerns over possible changes in the U.S. energy policies under President Donald Trump that could further squeeze demand for solar power and a likely rise in supply of its mainstay product polysilicon.

OCI on Tuesday announced its earnings guidance for 2016, saying that its operating profit for the year swung to a profit of 120.8 billion won ($105 million) in four years since 2012. Over the same period, net profit jumped 20.2 percent to 218.8 billion won and sales rose 23.5 percent on year to 2.74 trillion won on a consolidated basis.

But its annual operating profit came below the market consensus of 134.8 billion won and it posted an operating loss of 7.3 billion won for the fourth quarter ended December last year unlike the market estimation of 13.3 billion won operating income.

An official at the company cited the falling price of polysilicon, its mainstay product and the key raw material for solar cells, combined with lower demands as the main culprits for the poorer than expected earnings. In addition, it incurred loss December last year when it sold a solar power plant in Texas.

OCI outlook for this year also remains bleak. Renewable energy policies in the U.S. are expected to undergo major changes under President Donald Trump who favors traditional energy sources over alternatives, said Ji-woo Son, an analyst at SK Securities. He also noted that China’s GCL-Poly Energy Holdings Ltd. (GCL), the world’s largest manufacturer of polysilicon that OCI is directly competing against, plans to increase production this year, adding woes to OCI. Ji-yeon Lee, an analyst at Cape Investment & Securities, also forecast that demand for solar power will grow at about a 9 percent pace, compared to a 23 percent growth rate last year.

By Yoon Jin-ho

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