Vancouver's Hanwei Energy Services Corp. (TSX:HE) reported a 56.5% drop in revenue in its first quarter ending March 31, due to reduced sales caused by the production schedule of its wind power customer.
Revenue fell to $2.6 million from $5.9 million. Wind power product revenue fell to $500,000 compared with $4 million in the same period a year ago due to the timing difference in the delivery of wind power equipment that resulted from the customer's development schedule. In the first quarter, three sets of wind turbine blades were delivered compared with four turbines being delivered in the first quarter last year.
Despite the drop in revenue, the company does not expect the customer's wind farm development schedule to have an impact on the company's full-year delivery targets.
The bulk of sales in the first quarter came from the company's fibreglass reinforced plastic (FRP) pipes for the oil industry. FRP pipe sales rose to $2 million from $1.4 million in 2008's first quarter. The increase was driven by growth in the Kazakhstan market and the effect of foreign exchange rate fluctuations.
Net loss for the quarter rose to $3.5 million from $713,000.
Despite the global recession, Hanwei forecast a positive outlook for the company, reporting revenue growth of between 40% and 60% in 2009 compared with 2008. The wind power and pipe businesses are expected to account for more than 90% of the company's revenue in 2009 with an initial order for 100 megawatts worth of wind power equipment for delivery in 2009 and early 2010.
Hanwei's share price range during the past week: between $1.70 and $1.89; 52-week high: $4.18; 52-week low: $0.66.