LONDON, March 26 (Reuters) - British PV Crystalox Solar , which supplies silicon wafers to sol
ar cell makers, said it had a solid first quarter but was cautious about the outlook for 2009 given challenges faced by the market.
PV Crystalox, which beat forecasts for 2008 profit, said market weakness had become apparent in recent weeks and it was rescheduling deliveries for some customers, sending shares down over 8 percent on Thursday.
Demand for solar modules has fallen as credit for major projects has dried up, while falling fuel prices have led to a drop in interest for renewables, causing energy giant Royal Dutch Shell to drop plans for any more large investments in wind and solar energy.
'While we've seen some small level of rescheduling in the first quarter, I don't think we can say what the outlook is for Q2 and the rest of the year,' chief executive Iain Dorrity said.
PV Crystalox reported a doubling of 2008 pretax profit to 147 million euros ($200 million), beating analyst forecasts for 95 million. It ended the year with net cash of 81 million euros.
Elsewhere on Thursday, German Solarworld said it expected 2009 sales to rise but declined to give a net profit outlook in the face of falling prices.
'People are concerned about how they want to spend money and there is some reluctance to spend on solar systems,' PV Crystalox's head of German operations Hubert Aulich said.
PV Crystalox shares were down 7.7 percent at 78 pence at 0950 GMT. Its stock had already lost a sixth of their value since the start of the year as investors fretted about a possible downgrade to 2009-10 earnings following warnings from U.S. peer LDK Solar and Q-Cells of Germany.
But Dorrity said on Thursday PV Crystalox was set for increased production in 2009, with contracts for the supply of wafers sufficient for production of solar modules with total output of 275 megawatts in place.
'For this year, over 90 percent of our production is already contracted,' he said. 'Historically, the photovoltaic market has always been stronger in the second half when more installations take place.'
The company, which got 84 percent of its 2008 revenue from solar cell producers in Germany and Japan, increased wafer shipment volumes by 21 percent to 230 MW.
KBC Peel Hunt analysts maintained their 'buy' rating on the stock, highlighting the company's long-term contracts and strong financial position. 'Long-term contracts and a strong market position make PV Crystalox relatively resilient in a sector that is in turmoil,' they wrote in a note.
(Reporting by Victoria Bryan; editing by Mike Nesbit and Dan Lalor)
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