PVCS.L Share News (PVCS)

PV Crystalox Solar, which produces silicon wafers for use in solar power generation systems, expects first half revenues to take a 10% dive from last year's half-yearly revenues.The company has seen a further decline in demand for its products since its preliminary results announcement at the end of March.Many customers still have high levels of inventory and thus have been deferring orders. As a result, total shipments in the first half are expected to be in the region of 90 – 95 megawatts (mw), against 110mw in the first half of last year.On a positive note, the slide in volumes has been partly offset by the strength of the Japanese yen, which has had a beneficial effect on average wafer prices.The credit crunch has led to oversupply in PV Crystalox’s market and has put downward pricing pressure on all parts of the value chain, including spot wafer prices, which are below the company’s contract levels.‘In view of the challenging market circumstances, we have agreed temporary price flexibility with some of our customers,’ the company said, adding that it expects to reap the benefit of an improved relationshop with customers when the market picks up. At the same time, the company has had talks with its suppliers and has already achieved some concessions on short term pricing.Prospects for the second half of the year remain difficult to predict. ‘Although we have contracts for the supply of 275mw wafers in 2009 as a whole, there is greater uncertainty that our forecast shipment volumes will be achieved,’ the company said.The company said it has a strong balance sheet and remains well placed to take advantage of the upturn in global photovoltaic (solar energy) markets when it arrives.