Considering the news , the SP held up well today however it will be under pressure in the days ahead. The Chinese economy is keeping the rest of the world alive just now but it also has its down side as in the news here.
"Trading conditions during the first half of 2012 have been extremely challenging and this has had a significant impact on our trading performance. However, the settlement that we reached in May for early termination of a long term contract has resulted in a strong net cash position at the period end.
Looking forward, the intensely competitive market conditions are not expected to improve in the short term and so we continue with our cash conservation strategy. The Board will make the necessary decisions during the remainder of the year to serve the best interests of shareholders."
· Industry oversupply primarily from China leading to intense pressure on pricing · Wafer spot pricing down 70% during twelve months to April 2012, and are continuing to fall · Formal antidumping investigations in USA and Europe into unfair trade practices from Chinese PV companies
Overview of results
· Wafer shipments 61MW (H1 2011: 204MW) · Revenues €32.6m (H1 2011: €129.6m) · EBIT loss of €12.2m (H1 2011: profit of €24.3m) · Cash settlement on termination of long term contract of c. €90m leading to net cash of €122.4m at the period end (end 2011: €22.6m)
So whats happening with this company are they going to continue trying to trade on or are they winding up? I ask as a friend mentioned that they would be worth a punt as the share value would be 11p even if they sold up?
Sooner or later, though, he will have to decide whether PV Crystalox has any future at all. In a recent note, Peel Hunt said: “Investors are soon going to need to choose whether to push for maximising short-term cash returns (dividends, buybacks) or maintaining an industrial base in case of a solar market recovery.”
Belief in the latter is not unrealistic: Bloomberg New Energy Finance said prices are “below manufacturing cost, and consequently unsustainable”. But even if prices do stage a comeback, PV Crystalox’s glory days are surely behind it.
Danny Fortson Published: 12 August 2012 Sunday Times
ONCE upon a time PV Crystalox Solar was a big company. At its height in 2008 the maker of components for solar panels was tickling the £1 billion mark.
As of Friday, it was worth just £33m. Its main plant in Germany sits idle as management wait, quite possibly in vain, for panel prices to recover. Some say it should just wind itself up and return cash to shareholders.
The company is a cautionary tale of what happens when European manufacturers go head to head with the Chinese juggernaut.
A couple of figures tell the story. One is 75% — the drop in solar panel prices over the past three years thanks to a flood of cheap Chinese products. The second is 50 gigawatts — the global production capacity for a market that, according to Bloomberg New Energy Finance, is not likely to need more than 30GW this year.
Again, most of this production is in China. The fallout has been horrendous. A pair of German panel makers — Q.Cells and Solon — have gone bankrupt. America’s First Solar shut its European arm in April.
These are the prospects PV Crystalox faces. Its German factory, located in the appropriately named town of Bitterfeld, makes wafers that go into photovoltaic panels. It has been shut down for nearly a year because its only other option is to sell its wares at a loss.
The other plant at Abingdon, Oxfordshire, which churns out solar ingots, is still operating to comply with long-term contracts. Investors are less concerned with its core business, however.
So dramatic has been the shift in the industry that PV Crystalox’s fortunes now depend more on courtroom battles than its manufacturing prowess. The company announced in May it had reached a €90m settlement with a customer that had pulled out of a contract. The payout was equal to four times its market value at the time. It is in arbitration with at least one other customer that no longer wants what PV Crystalox is selling.
Analysts have pencilled in a big loss for the first half of the year. After that deficit is taken into account, plus tax on the settlement, the company should still be left with a cash pile of at least €50m. That would be equivalent to about 10p a share, more than the 8p at which the stock closed on Friday.
Investors want some of that cash. They forced the resignation of Maarten Henderson, the chairman, in May. Iain Dorrity, the chief executive, has intimated that he could buy back shares or distribute some of the settlement money through a dividend. He will end the suspense on Thursday with the company’s first-half results.
Sooner or later, though, he will have to decide whether PV Crystalox has any future at all. In a recent note, Peel Hunt said: “Investors are soon going to need to choose whether to push for maximising short-term cash returns (dividends, buybacks) or maint
So Thursday is going to be a massive day for us. Think we might see a 3 or 4p special dividend, but that just my feeling in the matter. In the paper article they say PVCS has a cash pile amount to 10p a share. So defo going to be interested what they tell us on Thursday, but not sure what the future holds. GLA
in the telegraph on sunday...pretty downbeat...the positive being the cash ,but many negatives...german factory production stopped and only obligations to current contract keeping oxford going.. shame ,but more concentration on new generation photo cells would have helped. warks uni are doing a programme of tests now.Company will either return cash to shareholders or hang around for an upturn...in a market dominated by cheaper chinese products. Tough one.I remember thge mail tipping this to go over £2..I belive thgat analyst/journo ..still has a job... also a shame..
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