Interim Management Statement (5857Q)
October 21 2011 - 2:00AM
UK Regulatory
TIDMPVCS
RNS Number : 5857Q
PV Crystalox Solar PLC
21 October 2011
PV Crystalox Solar PLC
21 October 2011
Interim Management Statement
In light of the ongoing difficult market conditions in the solar
industry PV Crystalox Solar PLC ("the Group") has brought forward
its Interim Management Statement to today's date. This announcement
is provided in accordance with the UK Listing Authority's
Disclosure and Transparency Rules, for the period from 30 June 2011
to the date of this announcement.
The anticipated recovery in PV end-market demand stimulated by
lower module prices has been weaker than expected in the second
half of 2011, particularly in Germany, the largest global market.
Furthermore, the hitherto expected year-end rally, driven by the
pull-in effect of installations in advance of the feed-in tariff
cut, does not appear to be materialising.
Since our interim results statement wafer prices on the spot
market have decreased by more than 20%, meaning that the overall
decline since April is greater than 50%. This decline has been
driven by a combination of weak demand coupled with significant
over-capacity and high inventories.
Some of our customers have reduced production in response to the
weak market conditions and accordingly the Group now expects full
year shipment volumes to be in the range 360-390MW. This is broadly
flat in comparison with the 378MW shipped the previous year but
below the 400-450MW indicated at the time of our interim results on
18 August 2011.
In light of these market conditions the Board has resolved to
take appropriate actions to manage the business through these
difficult times and to conserve the Group's cash. In the short term
the Group intends to reduce production output at its UK ingot and
German wafer operations. The Board also intends to suspend
production temporarily at its polysilicon facility in Bitterfeld,
Germany. Regrettably these actions will lead to significant job
losses in the UK and short time working in Germany. In addition the
Group will continue to have discussions with its suppliers in order
to reduce costs and will continue to seek further methods of
achieving greater efficiencies within the Group's operations.
As a result of the lower volumes, the intense pricing pressure,
and the associated inventory write-downs the Group now expects to
incur an operating loss for the full year. The Group continues to
review the carrying value of assets, and the result would be a
significant non-cash impairment at the year-end, if market
conditions persist.
The Group's cash position remains positive and the above
measures have been instigated to minimise cash outflows, and the
Group expects to have a healthy cash balance at the end of the
year. Whilst the market conditions are currently difficult, the
Board's actions are a necessary response, designed to preserve the
capabilities within the business. The Group continues to believe
that the medium-term outlook for solar installations remains
positive and in the importance of protecting the Group's
capabilities and cash for the future. The Group continues to review
industry conditions on an ongoing basis.
Enquiries:
PV Crystalox Solar PLC +44 (0) 1235 437188
Iain Dorrity, Chief Executive Officer
Peter Finnegan, Chief Financial Officer
Matthew Wethey, Group Secretary
FTI Consulting +44 (0) 20 7831 3113
James Melville-Ross
Tracey Bowditch
This information is provided by RNS
The company news service from the London Stock Exchange
END
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