LONDON (Alliance News) - PV Crystalox Solar PLC Thursday said that it plans to complete a strategic review of its business before the end of the year in light of continued adverse market conditions, and posted a widened pretax loss for its first half.
The photovoltaic silicon wafer provider reported a pretax loss of EUR9.5 million for the half year to end-June, widened from a pretax loss of EUR6.9 million a year before, as a rise in revenue to EUR33.4 million from EUR30.1 million was offset by a big jump in the cost of materials and services to EUR38.9 million from EUR31.3 million.
The company said that the global photovoltaic industry environment deteriorated further during 2015 as international trade disputes continued, and industry overcapacity, primarily in China, persisted. Its remaining long term contract customer failed to buy wafers in line with its obligations, and despite "extensive negotiations" over the last two years, it has not been able to negotiate mutually agreeable terms that would allow the supply of wafers to be resumed.
The company filed a request for arbitration in March with the International Court of Arbitration of the International Chamber of Commerce in the "absence of any substantive progress."
PV Crystalox has long-term polysilicon purchase agreements signed in 2008 and 2010, however the contracted polysilicon pricing "very considerably exceeds" current market levels, and is "incompatible with current wafer prices." It has agreed an adjustment of both pricing and volumes on two of the agreements, and with the third larger contract it is continuing to negotiate terms, although this contract will expire at the end of 2015.
"The adverse market conditions which have existed since 2011 are expected to continue in the short term and the recent devaluation of the Chinese currency is likely to intensify pressure on pricing. In view of the challenging environment and mindful of the need to protect shareholder value, the board plans to complete a strategic review of the business before the end of the year," said Chief Executive Officer Iain Dorrity in a statement.
Shares in PV Crystalox were down 8.2% at 8.61 pence Thursday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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