South Korea’s Hanwha Solutions has decided to close its solar-grade polysilicon business after years of losses, joining the country’s largest solar polysilicon maker and its only local rival OCI that last week announced to cease domestic production amid intensifying competition from cheap products from China.

Hanwha Solutions said its board on Thursday approved a plan to shutter the company’s solar-grade polysilicon business. Polysilicon manufacturing costs are higher than its selling price, causing more losses than gains and it will jettison the business within this year to resolve unrest, the company explained. Hanwha Solutions was formed in 2020 through the merger of Hanwha Chemical, Hanwha Q Cells and Hanwha Advanced Materials.

Under the latest decision, the scrap value of remaining polysilicon production facilities will be reflected as losses in last year’s accounting books.

As a result, the company shifted to red with a net loss of 248.9 billion won ($207.4 million) for 2019 from a profit of 160.4 billion won a year ago, the company revealed in a regulatory filing on Thursday. Operating profit for the year was 378.3 billion won, up 6.77 percent, over sales of 9.50 trillion won, up 5.05 percent from the previous year, the company said in a regulatory filing.

For the October-December quarter, the company swung to an operating profit of 30 billion won from 95.9 billion won loss a year ago.

By division, Hanwha Solutions’ solar power business delivered a record-breaking operating profit of 223.5 billion won last year, driven by strong sales in advanced markets with its focus on more efficient mono solar cells.

The corresponding figure for the company’s chemical business division was dwindled to 174.9 billion won due to a sharp decline in polyethylene demand. The advanced materials division responsible for auto parts posted an operating loss of 30.7 billion won.

Hanwha Solutions announced on Thursday in a separate regulation that it will buy back 2,014,793 shares, or 1 percent of its outstanding shares, worth 37.98 billion won based on the closing stock price on Feb. 19 in a bid to prop up its stock and win back investors. Of total, the company will cancel 1,614,793 shares and use the rest as stock-based employee compensation. The company’s stock repurchase will begin Feb. 24 and end on May 21.

It also announced on the same day it will pay 200 won cash dividend per share for its common stocks.

Shares of Hanwha Solutions on friday up 4.30 percent to 20,600 won at 9:35 a.m. in Seoul.

By Minu Kim

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