TIDMPVCS
RNS Number : 6695P
PV Crystalox Solar PLC
21 August 2014
PV Crystalox Solar PLC
Interim results to 30 June 2014
PV Crystalox Solar PLC (the "Group"), a leading supplier of
photovoltaic ("PV") silicon wafers, today announces its interim
results for the six months ended 30 June 2014.
Market overview
-- Intensively competitive PV industry environment continued in H1 2014
-- Wafer prices have fallen back to mid-2013 levels
-- Global PV installations lower than expected in H1 2014
-- PV trade disputes resume in USA and China
Overview of results
-- Cash conservation strategy continues
-- Wafer shipments 99MW (H1 2013: 84MW)
-- Revenues EUR30.1m (2013: EUR28.3m)
-- Loss from continuing operations EUR6.9m (H1 2013: Profit EUR1.3m)
-- Net cash of EUR35.4m on 30 June 2014 (31 December 2013: EUR39.2m)
-- EUR8.7m to be received in customer settlement in September 2014
Iain Dorrity, Chief Executive Officer, commented:
"Despite the continuing challenging PV market conditions, we are
pleased to report the Group has increased shipment volumes and
strengthened customer relationships in Taiwan and Europe. The Group
has a healthy net cash balance and maintains significant
manufacturing operating capacity. The Board believes that its
ongoing strategy will maximise shareholder value and position the
Group to take advantage of an eventual return of a more rational
business environment."
Enquiries:
PV Crystalox Solar PLC +44 (0) 1235 437160
Iain Dorrity, Chief Executive Officer
Matthew Wethey, Chief Financial Officer and Group Secretary
About PV Crystalox Solar PLC
PV Crystalox Solar is a long established supplier to the global
photovoltaic industry, producing multicrystalline silicon wafers
for use in solar electricity generation systems.
Chairman and Chief Executive's joint statement
Overview and strategic update
Despite the continuing challenging PV market conditions, we are
pleased to report the Group has increased shipment volumes and
strengthened customer relationships in Taiwan and Europe. Market
pricing remains our major concern with the oversupply from weaker
market demand in China during H1 2014 and a resumption of
international trade disputes driving prices below industry
production costs. The pressure on pricing seen in recent months has
reversed the modest recovery in wafer and cell prices seen during
the latter part of 2013 and the first quarter of 2014. In contrast
polysilicon, the key raw material, has maintained most of this
year's increase and currently trades above its price at the end of
2013.
In the 2013 Annual Report the Group announced that it intended
to increase production output during 2014 to consolidate links with
our new customers. Group shipments reached 99MW during H1 2014 up
18% on the 84MW (restated on the basis of 17% cell efficiencies)
achieved in the same period last year. In H1 2014 wafer shipments
marginally exceeded production output. Wafer production has
progressively increased during the period to enable wafer shipments
to be maintained at 2013 levels when sales volumes were boosted by
shipments from inventory. In the year ended 31 December 2013 this
resulted in a significant reduction in inventory levels.
Nevertheless the Group remains cautious and, in view of the
unfavourable market pricings we are maintaining the cash
conservation strategy and restricting production levels to around
30% of our 750MW operating capacity.
As in previous years the Group has continued to negotiate on a
periodic basis with its two polysilicon suppliers to modify pricing
and volumes under its long term contracts and has been able to
reach accommodation during the period to date. Polysilicon purchase
volumes still exceeded the Group's production requirements in the
period but the Group has been successful in trading excess
polysilicon at market prices in order to manage inventory.
In the case of one polysilicon supply contract the Group has
recently formally concluded an amendment to reduce prices
significantly and reschedule volumes.
During 2007-2008, Group companies entered into a number of
long-term agreements with customers to supply wafers at prices
which are now considerably above current market levels. Three wafer
supply contracts remained at the start of 2014 although in two
cases, customers have entered insolvency and shipments stopped in
2011 and 2012 respectively. Claims had been registered with the
respective administrators and we have been working to conclude
settlements.
As announced on 15 August 2014 a settlement was finally agreed
with one of those customers and has received court approval. As a
result the Group expects to receive a cash payment of approximately
EUR8.7 million during September 2014, which will be recognised as
income during H2 2014.
A settlement with the other customer in insolvency is expected
within the next six to twelve months, although the magnitude of any
cash payment is anticipated to be very significantly lower.
Negotiations with the final remaining long-term contract
customer are progressing with the aim of reaching an agreement to
resume wafer supply. In the absence of any agreement it will be
necessary to seek resolution through arbitration under the auspices
of the International Court of Arbitration.
Financial Review
In the financial statements all activities of the period are
classed as continuing. In the prior year, 2013, activities at the
polysilicon facility at Bitterfeld and its disposal were classed as
discontinued operations. The 2013 comparatives have been split
between continuing operations and discontinued operations. Comments
below, unless expressly stated, refer to the continuing
operations.
In H1 2014 Group revenue increased by 6% to EUR30.1 million (H1
2013: EUR28.3 million) mainly due to higher wafer sales volumes
offset by lower pricing.
During the period the Group generated a loss before interest and
taxes of EUR5.8 million (H1 2013: profit of EUR4.0 million). This
decrease in profitability was driven by lower wafer pricing and its
adverse impact on the onerous contract provision ("OCP"), and
unfavourable currency movements. In H1 2014 there was an OCP charge
to the income statement of EUR0.7 million whereas there was a
credit of EUR3.2 million in H1 2013. There was a currency loss of
EUR1.7 million in H1 2014 compared to a gain of EUR3.8 million in
H1 2013.
The OCP was created in respect of the onerous nature of the
Group's long-term polysilicon purchase agreements. The OCP unwinds
from period to period as the related contracts move towards expiry.
Details of the OCP are discussed in the Financial Review on page 15
of the 2013 Annual Report, a copy of which is available on the
Group's website www.pvcrystalox.com and details of the movement in
the OCP are set out in note 10 of the financial statements.
Net interest expense of EUR1.2 million (H1 2013: EUR2.4 million)
was almost wholly due to the unwinding of the discount rate used in
the calculation of the Group's OCP. The income tax charge in the
period was negligible (H1 2013: EUR0.2 million).
The Group's loss from continuing operations was EUR6.9 million
(H1 2013: profit of EUR1.3 million).
The Group's net cash position at the end of the period was
EUR35.4 million which was EUR3.8 million lower than the net
position of EUR39.2 million at the start of the period. The main
outflows in the period were due to the adjusted loss of EUR10.7
million offset by a release of EUR5.9 million from working capital
and EUR1.0 million due to the favourable effects of foreign
exchange rate changes on cash balances.
The Group expects to retain a healthy net cash position through
to the year end, despite the anticipated continuing difficult
trading conditions, in part due to the EUR8.7 million cash
settlement from the administrators of one of the customers in
liquidation which is expected in September 2014.
Risk factors
The principal risks and uncertainties affecting the business
activities of the Group were identified under the heading "Risk
management and principal risks" in the Strategic report on pages 10
to 11 of the 2013 Annual Report, a copy of which is available on
the Group's website www.pvcrystalox.com . In the view of the Board
the key risks and uncertainties for the remaining six months of the
financial year continue to be those set out in the 2013 Annual
Report.
Market drivers
While market analysts expect global PV installations to increase
from 39GW in 2013 to 45-50GW in 2014, PV demand in the first half
of the year has been somewhat subdued due to slow progress in
China, which in 2013 was the world's largest market. Although
initial projections for Chinese PV installations in 2014 were in
the range 10-14GW with the majority expected to come from
distributed PV systems, only 3.3GW was installed by the end H1
2014. Despite this weak uptake China's National Energy
Administration ("NEA") recently confirmed the 2014 target as 13GW.
The high rate of installations in the remainder of the year is
expected to not only assist the Chinese domestic PV industry but
also to counteract oversupply in export markets.
Japan's solar market is continuing to grow, with more projects
coming online in 2014, according to new data and projections from
Bloomberg New Energy Finance which expects Japan to maintain its
position as the second largest market and to commission between
10-12GW during 2014.
Recent months have seen the renewal of PV industry trade
disputes in China and USA, which are expected to impact the market
significantly in the short term, although it would be premature to
assess the longer term consequences or beneficiaries.
In May 2014 the anti-dumping enquiry into polysilicon imports
into China was finally concluded. The Chinese Ministry of Commerce
("MOFCOM") announced that anti-dumping duties of 42% and 1.2%
anti-subsidy duties will apply to German, Italian and Spanish
companies for two years. Polysilicon imports from the German
company Wacker Chemie AG have been spared duties because of the
company's "price commitments" given to MOFCOM. An earlier enquiry
had imposed tariffs of up to 57% on polysilicon imports from USA
and South Korea.
On 25 July 2014 the US Department of Commerce ("DoC") announced
preliminary anti-dumping duties of 26% to 165% on modules partially
manufactured in China. The anti-dumping duties followed an
investigation into a complaint that Chinese manufacturers were
avoiding duties previously imposed in 2012 by using cells
manufactured overseas, particularly in Taiwan. Taiwanese cell
manufacturers will face duties ranging from 28% to 44%. The final
determination of the duties is scheduled for early 2015. The
charges are in addition to preliminary anti-subsidy rates as high
as 35% that were imposed in June 2014 to modules made by Chinese
manufacturers. Previous trade duties announced in 2012 will
continue to apply on modules manufactured entirely in China.
China responded to the recent US decision with an announcement
on 15 August 2014 that it was halting temporary imports of
polysilicon from 1 September 2014. Previously PV companies were
able to import the polysilicon under "processing trade" rules and
avoid duties, if the finished product, i.e. cells/modules, was
exported. Polysilicon imports under processing trade rules had
surged after China first imposed duties in 2013.
In contrast the EU response has been muted, and in April 2014
the EU actually reduced the minimum module price for Chinese
imports to EUR0.53/W from the EUR0.56/W which had been agreed in
the negotiated settlement following the EU anti-dumping enquiry
concluded in 2013. However the EU has received extensive complaints
that Chinese companies are violating the agreement and selling
products below the minimum price.
Outlook
Industry analysts forecast a sharp increase in PV demand during
the remainder of the year with expectations of 15GW of
installations in Q4 alone. This market recovery should at least
halt the wafer price decline seen during the last four months and
some market tightness may positively impact sales prices as supply
and demand come closer into balance.
The Group has a healthy net cash balance and maintains
significant manufacturing operating capacity. The Board believes
that its ongoing strategy will maximise shareholder value and
position the Group to take advantage of an eventual return of a
more rational business environment.
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2014
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2014 2013 2013
Total Total Total
Notes EUR'000 EUR'000 EUR'000
----------------------------------------- -------- ---------- ---------- ------------
Revenues 4 30,087 28,305 71,442
Cost of material and services 5,10 (31,337) (24,695) (55,103)
Personnel expenses (4,046) (3,310) (6,438)
Depreciation and impairment of property,
plant and equipment
and amortisation of intangible assets (157) (252) (441)
Other income 3,274 2,443 2,696
Other expenses (1,924) (2,318) (4,709)
Currency gains and losses (1,671) 3,778 3,081
(Loss)/earnings before interest and
taxes ("EBIT") (5,774) 3,951 10,528
Finance income 27 363 796
Finance cost (1,187) (2,773) (4,698)
(Loss)/earnings before taxes ("EBT") (6,934) 1,541 6,626
Income taxes 7 (3) (200) (390)
(Loss)/profit from continuing operations (6,937) 1,341 6,236
Discontinued operations:
Loss from discontinued operations 11 - (3,360) (2,577)
(Loss)/profit attributable to equity
owners of the parent (6,937) (2,019) 3,659
----------------------------------------- -------- ---------- ---------- ------------
Other comprehensive income
Exchange differences on translating
foreign operations 1,960 (4,389) (4,974)
----------------------------------------- -------- ---------- ---------- ------------
Total comprehensive loss
Attributable to equity owners of
the parent (4,977) (6,408) (1,315)
----------------------------------------- -------- ---------- ---------- ------------
Basic and diluted earnings/(loss)
per share in Euro cents
From continuing operations (4.4) 0.3 1.7
From discontinued operations - (0.8) (0.7)
----------------------------------------- -------- ---------- ---------- ------------
Basic and diluted in Euro cents 8 (4.4) (0.5) 1.0
----------------------------------------- -------- ---------- ---------- ------------
The accompanying notes form an integral part of these financial
statements.
Condensed consolidated balance sheet
as at 30 June 2014
As at As at
As at 30 June 31 December
30 June 2014 2013 2013
Notes EUR'000 EUR'000 EUR'000
---------------------------------- ----- ------------- -------- ------------
Intangible assets 47 76 44
Property, plant and equipment 9 2,385 2,444 2,351
Pension surplus 108 - 108
Other long-term assets 11,246 20,315 14,626
---------------------------------- ----- ------------- -------- ------------
Total non-current assets 13,786 22,835 17,129
---------------------------------- ----- ------------- -------- ------------
Cash and cash equivalents 35,396 69,411 39,900
Trade accounts receivable 7,663 13,664 13,473
Inventories 5 16,966 30,803 13,009
Prepaid expenses and other assets 10,473 9,806 11,504
Current tax assets 12 58 70
---------------------------------- ----- ------------- -------- ------------
Total current assets 70,510 123,742 77,956
---------------------------------- ----- ------------- -------- ------------
Total assets 84,296 146,577 95,085
---------------------------------- ----- ------------- -------- ------------
Loans payable - 5,425 690
Trade accounts payable 1,099 2,832 2,827
Deferred revenue 3,316 3,249 3,342
Accrued expenses 2,226 3,482 2,689
Provisions 10 14,699 10,741 12,594
Deferred grants and subsidies 135 161 152
Current tax liabilities 199 - 199
Other current liabilities 44 190 50
---------------------------------- ----- ------------- -------- ------------
Total current liabilities 21,718 26,080 22,543
---------------------------------- ----- ------------- -------- ------------
Accrued expenses 109 167 146
Pension obligation - 94 -
Provisions 10 8,732 31,616 13,969
Other long-term liabilities 43 43 43
---------------------------------- ----- ------------- -------- ------------
Total non-current liabilities 8,884 31,920 14,158
---------------------------------- ----- ------------- -------- ------------
Share capital 12,332 12,332 12,332
Share premium 50,511 75,607 50,511
Other reserves 25,096 - 25,096
Shares held by the EBT (7,211) (8,640) (7,610)
Share-based payment reserve 810 953 922
Reverse acquisition reserve (3,601) (3,601) (3,601)
Retained earnings (2,870) 34,674 4,067
Currency translation adjustment (21,373) (22,748) (23,333)
---------------------------------- ----- ------------- -------- ------------
Total equity 53,694 88,577 58,384
---------------------------------- ----- ------------- -------- ------------
Total liabilities and equity 84,296 146,577 95,085
---------------------------------- ----- ------------- -------- ------------
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2014
Shares
held Share-
by based Reverse Currency
Share Share Other the payment acquisition Retained translation Total
capital premium reserves EBT reserve reserve earnings adjustment equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------ -------- -------- --------- -------- -------- ------------ --------- ------------ --------
As at 1 January
2014 12,332 50,511 25,096 (7,610) 922 (3,601) 4,067 (23,333) 58,384
Share-based
payment charge - - - - 56 - - - 56
Award of shares - - - 399 (168) - - - 231
------------------ -------- -------- --------- -------- -------- ------------ --------- ------------ --------
Transactions with
owners - - - 399 (112) - - - 287
------------------ -------- -------- --------- -------- -------- ------------ --------- ------------ --------
Loss for the
period - - - - - - (6,937) - (6,937)
Currency
translation
adjustment - - - - - - - 1,960 1,960
------------------ -------- -------- --------- -------- -------- ------------ --------- ------------ --------
Total
comprehensive
income - - - - - - (6,937) 1,960 (4,977)
------------------ -------- -------- --------- -------- -------- ------------ --------- ------------ --------
As at 30 June 2014 12,332 50,511 25,096 (7,211) 810 (3,601) (2,870) (21,373) 53,694
------------------ -------- -------- --------- -------- -------- ------------ --------- ------------ --------
As at 1 January
2013 12,332 75,607 - (8,640) 819 (3,601) 36,693 (18,359) 94,851
Dividends paid - - - - - - - - -
Share-based
payment charge - - - - 134 - - - 134
------------------ -------- -------- --------- -------- -------- ------------ --------- ------------ --------
Transactions with
owners - - - - 134 - - - 134
------------------ -------- -------- --------- -------- -------- ------------ --------- ------------ --------
Loss for the
period - - - - - - (2,019) - (2,019)
Currency
translation
adjustment - - - - - - - (4,389) (4,389)
------------------ -------- -------- --------- -------- -------- ------------ --------- ------------ --------
Total
comprehensive
income - - - - - - (2,019) (4,389) (6,408)
------------------ -------- -------- --------- -------- -------- ------------ --------- ------------ --------
As at 30 June 2013 12,332 75,607 - (8,640) 953 (3,601) 34,674 (22,748) 88,577
------------------ -------- -------- --------- -------- -------- ------------ --------- ------------ --------
Condensed consolidated cash flow statement
for the six months ended 30 June 2014
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2014 2013 2013
Notes EUR'000 EUR'000 EUR'000
-------------------------------------------------- ----- ---------- ---------- ------------
CONTINUING OPERATIONS
Earnings before taxes (6,934) 1,541 6,626
Adjustments for:
Net interest expense 1,160 2,410 3,902
Depreciation and amortisation 157 223 441
Inventory writedown - 934 681
Change in pension accruals 287 134 35
Decrease in provisions (5,345) (17,710) (31,747)
Profit from the disposal of property,
plant and equipment (2) (1,142) (1,072)
Losses in foreign currency exchange - - (500)
Change in deferred grants and subsidies (24) (31) (37)
-------------------------------------------------- ----- ---------- ---------- ------------
(10,701) (13,641) (21,671)
-------------------------------------------------- ----- ---------- ---------- ------------
Changes in working capital
(Increase)/decrease in inventories (3,370) 3,861 20,965
Decrease/(increase) in accounts receivables 6,749 (4,793) (5,731)
Decrease in accounts payables and advance
payments (2,804) (443) (214)
Decrease in other assets 5,342 6,872 9,508
Decrease in other liabilities (9) (190) (335)
-------------------------------------------------- ----- ---------- ---------- ------------
(4,793) (8,334) 2,522
-------------------------------------------------- ----- ---------- ---------- ------------
Income taxes received 53 1,160 1,118
Interest received 27 363 796
-------------------------------------------------- ----- ---------- ---------- ------------
Net cash flows (used in)/from operating
activities (4,713) (6,811) 4,436
-------------------------------------------------- ----- ---------- ---------- ------------
Cash flow from investing activities
Proceeds from sale of property, plant
and equipment 2 1,282 1,190
Cash disposed of as part of sale of discontinued
operations - (2,869) (2,477)
Proceeds from investment grants and subsidies 7 - -
Payments to acquire property, plant and
equipment
and intangibles (136) (51) (122)
-------------------------------------------------- ----- ---------- ---------- ------------
Net cash flows used in investing activities (127) (1,638) (1,409)
-------------------------------------------------- ----- ---------- ---------- ------------
Cash flow from financing activities
(Repayment) / drawdown of bank and other
borrowings (712) 797 (3,356)
Dividends paid - - (36,285)
Interest paid (1) (26) (101)
Net cash flows (used in)/from financing
activities (713) 771 (39,742)
-------------------------------------------------- ----- ---------- ---------- ------------
Net change in cash and cash equivalents
available from continuing operations (5,553) (7,678) (36,715)
-------------------------------------------------- ----- ---------- ---------- ------------
Net change in cash and cash equivalents
available from discontinued operations 12 - (15,750) (15,750)
-------------------------------------------------- ----- ---------- ---------- ------------
Cash generated from continuing and discontinuing
operations - (23,428) (52,465)
-------------------------------------------------- ----- ---------- ---------- ------------
Effects of foreign exchange rate changes
on cash and cash equivalents 1,049 (1,841) (2,315)
-------------------------------------------------- ----- ---------- ---------- ------------
Cash and equivalents at beginning of
period 39,900 94,680 94,680
-------------------------------------------------- ----- ---------- ---------- ------------
Cash and equivalents at end of period 35,396 69,411 39,900
-------------------------------------------------- ----- ---------- ---------- ------------
The accompanying notes form an integral part of these financial
statements.
Notes to the condensed consolidated interim financial
statements
for the six months ended 30 June 2014
1. Basis of preparation
These condensed consolidated interim financial statements are
for the six months ended 30 June 2014. They have been prepared in
accordance with International Accounting Standard ("IAS") 34,
'Interim Financial Reporting'. They do not include all the
information required for full annual financial statements and
should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2013.
The statements have been prepared applying the accounting
policies and presentation that were applied in the preparation of
the 2013 financial statements.
The nature of the Group's operation means that it can vary
production levels to match market requirements. As part of the cash
conservation measures and the associated planning assumptions,
production output has been reduced to match expected demand.
On 30 June 2014 there was a net cash balance of EUR35.4 million,
comprising cash or cash equivalents of EUR35.4 million. All short
term loans were repaid in the period.
The Group will be able to operate within its net cash reserves
for the foreseeable future.
Therefore, whilst any consideration of future matters involves
making a judgement at a particular point in time about future
events that are inherently uncertain, the directors, after careful
consideration and after making appropriate enquiries, are of the
opinion that the Group has adequate resources to continue in
operational existence for at least twelve months from the date of
approval of the financial statements. Thus the Group continues to
adopt the going concern basis of accounting in preparing the
financial statements.
Were the Group not to adopt the going concern basis at any
point, all assets and liabilities would be reclassified as short
term and valued on a break up basis.
2. Basis of consolidation
The Group financial statements consolidate those of the Group
and its subsidiary undertakings drawn up to 30 June 2014.
Subsidiaries are entities over which the Group has the power to
control the financial and operating policies so as to obtain
benefits from its activities. The Group obtains and exercises
control through voting rights. Consolidation is conducted by
eliminating the investment in the subsidiary with the parent's
share of the net equity of the subsidiary.
The results of any subsidiary sold or acquired are included in
the Consolidated Statement of Comprehensive Income up to, or from,
the date control passes.
3. Functional and presentational currency
The financial information has been presented in Euros, which is
the Group's presentational currency.
4. Segment reporting
The segments are defined on the basis of the internal
organisational and management structure and on the internal
reporting to the Board. IFRS 8 requires entity-wide disclosures to
be made about the countries in which the Group earns its revenues
and holds its assets, which are shown below:
Segment information for the six months ended 30 June 2014
Rest
United of Rest of
Japan Taiwan Korea Germany Kingdom Europe World Group
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Revenues
- by entity's country of
domicile 124 - - 2,139 27,824 - - 30,087
- by country from which
derived 149 18,881 4,299 62 - 6,108 588 30,087
------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Non-current assets*
- by entity's country of
domicile 218 - - 1,064 12,396 - - 13,678
------------------------- -------- -------- -------- -------- -------- -------- -------- --------
* Excludes financial instruments, deferred tax assets,
post-employment benefit assets and rights arising under insurance
contracts.
Four customers accounted for more than 10% of Group revenue each
and sales to these customers are as follows (figures in
EUR'000):
-- 8,590 (Taiwan),
-- 5,421 (Taiwan),
-- 4,244 (Korea); and
-- 3,820 (Taiwan).
Segment information for the six months ended 30 June 2013
Rest
United of Rest of
Japan Taiwan Korea Germany Kingdom Europe World Group
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Revenues
- by entity's country of
domicile 11,464 - - 3,664 13,177 - - 28,305
- by country from which
derived 11,354 3,649 - 2,315 7 1,035 9,945 28,305
------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Non-current assets*
- by entity's country of
domicile 360 - - 1,242 21,233 - - 22,835
------------------------- -------- -------- -------- -------- -------- -------- -------- --------
* Excludes financial instruments, deferred tax assets,
post-employment benefit assets and rights arising under insurance
contracts.
Two customers accounted for more than 10% of Group revenue each
and sales to these customers are as follows (figures in
EUR'000):
-- 11,105 (Japan); and
-- 8,476 (Rest of World).
5. Cost of material
Cost of material includes no inventory writedowns (H1 2013:
EUR0.9 million).
The writedowns in H1 2013 represented a reduction in value of
inventories to the anticipated sales price in H2 2014 (less future
processing costs where applicable) of finished goods, work in
progress and traded raw materials over and above that provided for
in the onerous contract provision.
6. Employee Benefit Trust
The Employee Benefit Trust ("EBT") currently holds 3,853,910
shares (2.4%) of the issued share capital in the Company. It holds
these shares in trust for the benefit of employees.
7. Income tax
The average taxation rate shown in the Consolidated Statement of
Comprehensive Income is 0% (H1 2013: -11%).
The taxation rate in the current period is distorted due to the
non-recognition of deferred tax assets.
The anticipated long-term average tax rate for the Group,
normalised on the basis that the Group returns to profitability, is
approximately 20%.
8. Earnings per share
The calculation of earnings per share is based on a loss before
tax on continuing operations for the period of EUR6.9 million (H1
2013: profit of EUR1.5 million) and the number of shares as set out
below:
Six months Six months
ended ended
30 June 2014 30 June 2013
------------------------------------------------------- ------------- -------------
Number of shares 160,725,335 416,725,335
Average number of shares held by the EBT in the period (3,990,051) (10,811,704)
------------------------------------------------------- ------------- -------------
Weighted average number of shares for basic earnings
per share calculation 156,735,284 405,913,631
Shares granted but not vested 2,127,348 -
------------------------------------------------------- ------------- -------------
Weighted average number of shares for fully diluted
earnings per share calculation 158,862,632 405,913,631
------------------------------------------------------- ------------- -------------
9. Property, plant and equipment
Additions to property, plant and equipment in the six months
ended 30 June 2014 were less than EUR0.1 million (H1 2013: less
than EUR0.1 million).
10. Onerous contract provision
Included in provisions is an onerous contract provision of
EUR23.4 million. Following a review of all the latest market
information and a review of the inputs to the onerous contract
provision, the following movements are reflected in the financial
statements.
As at
As at As at 31 December
30 June 2014 30 June 2013 2013
EUR'000 EUR'000 EUR'000
------------------------------------------- ------------- ------------- ------------
Onerous contract provision brought forward 26,526 52,047 52,047
FX movement 1,373 (5,919) (5,736)
Discounting factor adjustment 1,185 2,730 4,597
Utilised (6,412) (3,312) (12,730)
(Credited)/charged to the income statement 726 (3,224) (11,652)
------------------------------------------- ------------- ------------- ------------
Onerous contract provision carried forward 23,398 42,322 26,526
------------------------------------------- ------------- ------------- ------------
11. Discontinued operations
Analysis of the result of discontinued operations and the result
recognised on the re-measurement of assets is as follows:
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2014 2013 2013
EUR'000 EUR'000 EUR'000
------------------------------------------------------- ---------- ---------- ------------
Revenue - 316 316
Expenses - (2,736) (2,169)
------------------------------------------------------- ---------- ---------- ------------
Loss before tax of discontinued operations - (2,420) (1,853)
------------
Tax - (2) (2)
------------------------------------------------------- ---------- ---------- ------------
Loss after tax of discontinued operations - (2,422) (1,855)
------------------------------------------------------- ---------- ---------- ------------
Pre-Tax gain/(loss) recognised on the remeasurement
of assets of disposal group - (938) (722)
------------
Tax - - -
------------------------------------------------------- ---------- ---------- ------------
After tax gain/(loss) recognised on the re-measurement
of assets of disposal group - (938) (722)
------------------------------------------------------- ---------- ---------- ------------
Loss for the year from discontinued operations - (3,360) (2,577)
------------------------------------------------------- ---------- ---------- ------------
12. Change in cash from discontinued operations
Six months ended Six months
30 June 2014 ended Year ended
EUR'000 30 June 31 December
2013 2013
EUR'000 EUR'000
-------------------------------------------- ------------------ ----------- -------------
DISCONTINUED OPERATIONS
Earnings before taxes - (2,420) (1,853)
Adjustments for:
Depreciation and amortisation - 38 38
Impairment charge - (938) (720)
Derecognition of grants and subsidies - (18,452) (18,452)
Loss from the disposal of property, plant
and equipment and intangibles - 20,250 20,250
-------------------------------------------- ------------------ ----------- -------------
- (1,522) (737)
--------------------------------------------------------------- ----------- -------------
Changes in working capital
Decrease / (Increase) in inventories - 816 816
Decrease in accounts payables and deferred
income - (3,011) (3,796)
Decrease in other assets - 366 366
(Increase) / Decrease in other liabilities - (138) (138)
-------------------------------------------- ------------------ ----------- -------------
Net cash from operating activities - (3,489) (3,489)
-------------------------------------------- ------------------ ----------- -------------
Cash flow from investing activities
Payments to dispose of property, plant
and equipment and intangibles - (12,261) (12,261)
-------------------------------------------- ------------------ ----------- -------------
Net cash used in investing activities - (12,261) (12,261)
-------------------------------------------- ------------------ ----------- -------------
Net change in cash and cash equivalents
available from discontinued operations - (15,750) (15,750)
13. Changes in contingent assets and liabilities
There were no changes in contingent assets and liabilities.
14. Related party disclosures
The Group defines related parties as the senior executives of
the Group and also companies that these persons could have a
material influence on as related parties. During the reporting
period, none of the shareholders had control over or a material
influence in the parent group. All future transactions with such
related parties will be conducted under normal market
conditions.
15. Material post balance sheet events
As announced on 15 August 2014 the Group had been looking to
conclude settlements with the administrators of two long term
contract customers who had entered insolvency proceedings. A
settlement has been concluded with one of those customers and has
received court approval. As a result the Group expects to receive a
cash payment of approximately EUR8.7m during September 2014, which
will be recognised as income during H2 2014.There were no other
material post balance sheet events.
16. Approval of interim financial statements
The unaudited interim financial statements were approved by the
Board of Directors on 20 August 2014.
The financial information for the year ended 31 December 2013
set out in this Interim Report does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31
December 2013 have been filed with the Registrar of Companies. The
Auditors' Report on those financial statements was unqualified and
did not contain statements under Section 498(2) or Section 498(3)
of the Companies Act 2006.
Statement of directors' responsibilities
to the members of PV Crystalox Solar PLC
The directors confirm that this condensed set of financial
statements has been prepared in accordance with IAS 34, 'Interim
Financial Reporting' as adopted by the European Union and that this
Interim Report includes a fair review of the information required
by the Disclosure and Transparency Rules of the Financial Services
Authority, paragraphs DTR 4.2.7 and DTR 4.2.8.
The directors of PV Crystalox Solar PLC are listed at the end of
this Interim Report and their biographies are included in the PV
Crystalox Solar Annual Report for the year ended 31 December
2013.
By order of the Board
Matthew Wethey
Chief Financial Officer
20 August 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
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