Plummeting wafer selling prices and €71.6m (£60m) of exceptional costs have sent solar wafer and ingot manufacturer PV Crystalox spiralling into losses. Whilst PV would have reported operating profits of €4.1m, excluding these one-off costs, management are not expecting conditions to improve, and accordingly are focusing on preserving cash.
Prices for photovoltaic (PV) cells and modules (the products that convert solar energy into electricity) fell by 69 per cent in 2011 as a result of surplus supply and are now below production costs. So despite shipments rising to 384 megawatts (MW) from 378 MW previously, full-year revenues plunged 17 per cent.
Management have tried to shield the company through renegotiated contracts, reduced production levels and a suspension of operations in its German plant, Bitterfeld. Output is now running at about 40 per cent of average 2011 levels, and shipments are expected to fall to 80 to 100MW in the first half of 2012. The company will also benefit from reduced input prices and continued focus on cost cutting as it tries to weather the storm.
PV CRYSTALOX SOLAR (PVCS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 4.74p | MARKET VALUE: | £18.8m | |
| TOUCH: | 4.5-4.74p | 12-MONTH HIGH: | 58p | LOW:3.55p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 44p | NET CASH: | €22.6m | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2007 | 263 | 70.8 | 12.0 | 2.5 |
| 2008 | 274 | 147.0 | 25.2 | 6.0 |
| 2009 | 237 | 42.5 | 7.2 | 4.0 |
| 2010 | 253 | 33.7 | 5.7 | 3.0 |
| 2011 | 210 | -67.1 | -15.0 | nil |
| % change | -17 | - | - | -100 |
| £1 = €1.19 | ||||
