13 Dec 2012 07:00
PV Crystalox Solar PLC
13 December 2012
Trading Update
On 19 November, PV Crystalox Solar plc ("the Group") advised in its Interim Management Statement that trading conditions remain extremely challenging due to the vast overcapacity in the PV industry. This oversupply, which originates primarily in China, has maintained downward pressure on prices across the value chain during the last eighteen months. Spot wafer prices have continued to fall and are now 77% below the level of April 2011 and remain significantly below industry production costs. As a result the Board continues to expect that the Group will incur an operating loss in the second half of this year.
The Board has now completed a strategic review of the business which has taken account of these adverse market conditions and the Group's significant net cash balance. The outcome of this review is that the Group will carry out a radical restructuring while retaining its core production capabilities and returning excess cash to shareholders.
The Group intends to adjust its operations to align with anticipated sustainable short term market demand so that the ongoing business will be broadly cash neutral in 2013. As part of this programme the Group i) will discontinue its polysilicon production facility in Bitterfeld, Germany; and ii) will reduce substantially its production output at its UK ingot and German wafer operations. Regrettably these actions will lead to very significant job losses both in the UK and in Germany.
The Group expects to return cash to shareholders during Q2 2013 in a manner that will provide shareholders with an element of choice as to the form in which they receive the cash. Further details on the process will be announced in due course.
Enquiries:
PV Crystalox Solar PLC +44 (0) 1235 437188
Iain Dorrity, Chief Executive Officer
Peter Finnegan, Chief Financial Officer
Matthew Wethey, Group Secretary
FTI Consulting +44 (0) 20 7831 3113
James Melville-Ross
Sophie McMillan
Tracey Bowditch