Having already guided expected GAAP net losses of US$145-195 million for 2020, high-performance PV manufacturer, SunPower is planning to make operating cuts to save around US$50 million, due to ongoing impact of COVID-19 and has withdrawn previous financial guidance for the year.
This is contrast to the company’s view on COVID-19 in mid-February when PV Tech reported management expected “minimal impact” from the coronavirus crisis on its Q1 2020 figures.
SunPower CEO Tom Werner had said in the mid-February earnings call that logistics are currently “challenged” in China, creating “shortages”. He said however that if current “positive signs” – such as factories coming back online – continue, SunPower “expect to manage through this and hold guidance as we guided today.”
The pandemic that ensued has created further supply chain issues that no emergency pre-planning would have visualised or dealt with, compounded by its small number of key markets seriously impacted by lockdowns.
In the US, two of SunPower’s major downstream markets include California and New York state are both in lockdowns. Key European markets for SunPower such as Germany, France and UK are also in lockdown with more expected to come, due to COVID-19.
SunPower’s supply chain issues have been compounded by manufacturing solar cells in Malaysia and the Philippines, which are air freighted to Mexico, Oregon and France for module assembly. The company also has JV cell and module assembly operation in China.Transportation solutions became more scarce during lockdown, affecting their supply chain.
Although the company did not provide any details on the COVID-19 impact to its manufacturing operations in the US, China, Malaysia, Philippines, Mexico and France leading US-based manufacturer, First Solar did.
The CdTe thin-film manufacturer said that its manufacturing operations in the US, Malaysia and Vietnam were operating as normal and not yet forced to close due to lockdowns in Ohio and Malaysia. The Philippines and French lockdowns are ongoing.
SunPower only noted its manufacturing operations from the context of the ongoing spin-off of most manufacturing operations into an independent, publicly traded company, Maxeon, which was still expected to close by the end of June 2020.
SunPower’s latest wave of cost cutting includes an unspecified reduction in capital expenditures, a reduction in management salaries and the freezing of all hiring and merit increases within the workforce.
The company did not say if job losses were part of the current round of cost cutting.
SunPower did note that it expected to provide further details on its 2020 forecast on its first quarter 2020 earnings call in May.
