19th Mar 2015 09:04
LONDON (Alliance News) - PV Crystalox Solar PLC Thursday warned it does not expect to return to profitability during 2015, after swinging to a pretax loss in 2014, as competition and trade disputes between the US and China continued to put pressure on pricing in the solar marketplace.
PV Crystalox Solar supplies photovoltaic silicon wafers.
The company posted a pretax loss of EUR4.7 million in 2014, swung from a pretax profit of EUR6.6 million in 2013, as a decline in revenue to EUR53.3 million from EUR71.4 million was compounded by higher cost of materials and services and a provision for onerous contracts.
Whilst it maintained the same level of wafer shipments in 2014 as in 2013, trading volumes of excess polysilicon were significantly lower than in 2013.
Wafer prices saw a modest recovery in late 2013, but have since declined, PV Crystalox Solar said, with current prices around 10% below their peak in the first quarter of 2014 and premium wafers seeing a fall in price close to 20%. The price of key raw material polysilicon has been maintained, further squeezing company margins.
Although PV Crystalox Solar said the strength of the dollar helped to reduce production costs, they still exceed market prices, it said.
The company cited challenges ahead in both bringing its production costs in line with market prices, but also a shrinking customer base as EU manufacturers have declared bankruptcy or have shutdown, and solar cell production declining in Europe and Japan.
PV Crystalox Solar noted that global PV installations are forecast to see double-digit growth for 2015, but the company said there is little expectation in the short term for any relief to the pricing pressure it has experience in recent months.
"The board continues to believe that our cash conservation strategy is the necessary response to current market conditions, enabling us to protect shareholder value whilst preserving the group's core production capabilities. Whilst the board remains committed to the solar industry, our future is dependent upon sensible trading conditions returning to the solar marketplace," said Chairman John Sleeman in a statement.
Shares in PV Crystalox Solar are trading down 7.5% at 10.64 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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