Sinovel blamed the sharp decline in net profits on ferocious market competition in 2011, which reduced its sale prices, sales revenues of wind turbines and gross profits.
Reduced sales and net profits were also attributed to postponed construction of some wind farm plants, Sinovel said, because of delayed government approval for the wind farm 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 turbines prices, resulting in sharp declines in profits.