LONDON (Alliance News) - PV Crystalox Solar PLC said Monday that its financial position remains strong, despite challenging PV market conditions and pricing pressure resuming as reduced demand in China reversed much of the gains recorded earlier in the year.
In an interim management statement for the period January 1, 2014 to date, the supplier of photovoltaic silicon wafers for use in solar electricity generation systems said PV market conditions remain challenging with previously seen pressure on pricing resuming in recent weeks, following the modest recovery seen at the beginning of the year and during the latter part of 2013.
Weaker internal demand in China has hit PV Cyrstalox Solar's balance sheet as this has renewed the global oversupply of wafers and driven down pricing, reversing most of the gains seen earlier in the year, it said.
Pricing is also an issue, remaining below industry production costs as polysilicon, the key raw material, has maintained most of this year's increase and currently trades well above its price at the end of 2013.
The company said it is in negotiations with its polysilicon suppliers and has achieved adjustments to pricing and volumes under long-term contracts.
PV Crystolox said shipment volumes in 2013 were boosted by sales from inventory, doubling production output during the first-half of 2014 has enabled these volumes to be maintained. Wafer shipments during the first-half of the year are expected to be in the range of 95-100MW, compared to 84MW in the first-half last year, broadly in line with the increase in output, it said.
Looking ahead, the company said its financial position remains strong, although, as previously reported it has made progress in reducing internal production costs in order to increase production output to consolidate relationships with existing customers.
"An improved market environment with a reduction in oversupply and more favourable pricing is expected in the second half of the year as the rate of PV installations in China accelerates to meet the 14GW national target for 2014..." said the company. "The ongoing cash conservation strategy is expected to maintain the Group's healthy net cash position throughout the year."
Shares in the company were trading 13.27% lower at 19.08 pence per share early Monday afternoon, one of the biggest fallers on the London market.
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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