17 May 2013 07:00
PV Crystalox Solar PLC
17 May 2013
Interim Management Statement
This announcement is provided in accordance with the UK Listing Authority's Disclosure and Transparency Rules, for the period from 1 January 2013 to the date hereof.
PV market conditions remain very difficult but spot market price declines appear to have halted and there has been some modest recovery in prices across the value chain since the beginning of the year. Wafer prices, however, remain below industry production costs.
In view of the challenging environment the Group continues to operate in cash conservation mode with reduced wafer production volumes, a continued focus on cost control and inventory management, including trading of excess polysilicon as opportunities arise.
Wafer shipments in H1 are expected to exceed production volumes and to be in the range 75-85MW, which is above the 61MW reported for the same period last year. We have successfully traded surplus polysilicon during 2013 and, as a result, our inventory levels of both wafers and polysilicon have been reduced since the year end. As referred to in the announcement of our 2012 annual results, released on 21 March 2013, production costs have been lowered as a result of the more favourable pricing and volume that has been negotiated to date with our wafering subcontractor and polysilicon suppliers.
Preparations for the deconstruction and site clearance of the Group's polysilicon facility at Bitterfeld and negotiations with employees regarding redundancy terms are both close to conclusion. However, these have been temporarily suspended as the Group has received an offer from local management to take over the facility and the associated obligations, including those relating to grants and subsidies, in return for a cash payment from the Group. The Board believes that this transaction would be preferable to the shut down scenario as it reduces cash outflows, gives certainty over their timing and can be completed in a much shorter timescale. We have received approval from the local grant awarding authorities for such a transfer and accordingly we are pursuing this potential transaction.
The Board has reached a decision on the amount of cash to be returned to shareholders and agreed a level of 7.25p per share subject to finalisation of the process of the cash return. The Board is not yet able to confirm the timing and mechanism of the return but expects to make a further announcement on these matters shortly.
As has been widely reported, the EU is expected to announce on 6 June that provisional anti-dumping duties averaging 47% are to be levied on solar products imported from China. Such a decision should benefit non-Chinese producers and contribute towards a more favourable market environment within the EU during the second half of the year.
Enquiries:
PV Crystalox Solar PLC +44 (0) 1235 437188
Iain Dorrity, Chief Executive Officer
Peter Finnegan, Chief Financial Officer
Matthew Wethey, Group Secretary