19 May 2010 07:00
PV Crystalox Solar PLC
19 May 2010
INTERIM MANAGEMENT STATEMENT
PV Crystalox Solar PLC (or "the Group") announces its Interim Management Statement, in accordance with the UK Listing Authority's Disclosure and Transparency Rules, for the period from 1 January 2010 to the date of this announcement. The Group announced its preliminary results for the year ending 31 December 2009 on 25 March 2010.
The Group has experienced increasing demand for its products during the year to date, with market growth being driven in particular by the impending cut in the feed in tariff (FIT) in Germany which will now be implemented from 1 July. Shipment volumes for the first half of the year are now expected to be in the range 155-160MW exceeding our earlier forecast of 145-155MW given at the time of our 2009 preliminary results. This expectation represents a significant growth on the 139MW shipped in the second half of 2009.
The increased market demand has also stabilised wafer pricing and our average wafer prices are expected to be slightly above the top end of the range we previously indicated in March.
Revenues for the first six months of the year are expected to be enhanced by the combination of higher volumes and stabilising prices and accordingly performance in the first half of 2010 is expected to be above management's earlier expectations.
While Germany remains the largest end market for PV module installations, China is the world's largest manufacturing centre and our shipments to China are growing rapidly as demand from our established customer base increases. China has now become our second largest geographic market having overtaken Europe in the first half of the year. Japan remains the major market for the Group's wafers where our customers are also benefiting from growing internal demand as installations continue to respond positively following last year's reintroduction of subsidies together with the introduction of a FIT. The Group continues to make good progress on its cost reduction programmes which are targeted to reduce wafer production costs by 10-15% during the year and these will positively impact margins.
Production at the Group's polysilicon production facility at Bitterfeld continues to ramp up satisfactorily and consistent product quality has been achieved. We remain on track to reach full production of 1800MT in 2011.
Although the cut in FIT in Germany had been expected to impact shipment volumes and pricing in the second half of the year, current indications are that demand and pricing in Q3 remain firm. Furthermore as Bitterfeld polysilicon production costs are expected to progressively decrease through the year we anticipate this having a beneficial impact on margins in the second half of 2010.
Our longstanding relationships with major PV companies and continuing focus on cost reduction and operating efficiencies enable the Group to benefit from the current upturn in the PV market. Whilst uncertainties remain, we are well positioned with our continued profitability, solid balance sheet and low cost base to take advantage of the anticipated future volume growth in the market.
Enquiries:
| PV Crystalox Solar PLC | +44 (0) 1235 437188 |
| Iain Dorrity, Chief Executive Officer Peter Finnegan, Chief Financial Officer Matthew Wethey, Group Secretary
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| Financial Dynamics | +44 (0) 20 7831 3113 |
| Juliet Clarke / James Melville-Ross / Haya Herbert-Burns
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