Sunpower Group is guiding for a net loss in the 3QFY2024 ended Sept 30.
The expected net loss is mainly due to the need to make a one-off provision for bad debt, which will impact the group’s bottom line by around RMB80.1 million ($14.9 million).
This is based on the latest information received from State Grid Shandong Electric Power Company and State Grid Jiangsu Electric Power Company, the wholly-owned subsidiaries of State Grid Corporation of China, on the amount of power subsidies from biomass generation available to two of Sunpower 5GD Group’s green investment projects that have biomass boilers for FY2021, FY2022 and FY2023. The projects refer to the one in Xintai City of Shandong Province and the project in Tongshan District, Xuzhou City of Jiangsu Province and the group’s financial years end on Dec 31.
The group had previously recognised the biomass power subsidies in respect of the project in Xintai and the project in Tongshan as trade receivables during FY2021, FY2022 and FY2023, reads its statement on Nov 5.
According to Sunpower, the possibility of recovering the relevant biomass power subsidies is “low” based on the current situation. As such, it intends to make a one-off provision for bad debt in its 3QFY2024 results and its FY2024 results.
The group says the provision for bad debt is one off in nature and that it fully reflects the potential loss from the information it received.
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Sunpower is expected to release its results on or before Nov 14.
As at 12.04pm, shares in Sunpower are trading 2 cents lower or 6.25% down at 30 cents.
