Sinovel net profits down by 50 percent in 2011

Sinovel, China's largest wind turbine maker, saw a 50-percent year-on-year decline in net profits attributable to parent company shareholders in 2011.

In announcement Monday night in Beijing, Sinovel said it gained a net profit of 2.86 billion yuan (US$453 million) in 2010. It means Sinovel won a net profit of about 1.4 billion yuan in 2011.

Sinovel blamed the sharp decline in net profits on ferocious market competition in 2011, which reduced its sale prices, sales revenues and gross profits.

Reduced sales and net profits were also attributed to postponed construction of some wind farms, Sinovel said, because of delayed government approval for the projects and cyclical fluctuation of the Chinese macro economy.

In 2011, Chinese wind turbine manufacturing enterprises suffered from a continued slide in profits.

In the first three quarters of 2011, Sinovel earned a profit of 901 million yuan, down 48.51 percent from the same period of the previous year. Goldwind, the second-largest Chinese wind turbine maker, gained a profit of 615 million yuan, down 59.85 percent year-on-year.

Industry officials say that under the macro control of the Chinese government, the Chinese wind power industry obviously slowed down the pace of expansion in 2011.

Because of delayed reaction to the market change, wind turbine makers, which kept expanding production capacity in previous years, had to cut down wind turbine prices, resulting in sharp declines in profits.