Major solar company’s steep decline continues under pressure from China
PV Crystalox Solar has seen revenues and profits fall dramatically in the last year as a consequence of a vast overcapacity on the PV industry which primarily originates in China.
Revenues have plummeted by 75% in the last year, from €129.6m in the first half of 2011 to €32.6m in the first half of 2012.
According to the company’s interim results released today, its net income also decreased from €18m to a loss of €28m in the same period.
Earnings before tax and interest have also slumped by €12.2m.
The company’s net cash position has been bolstered by a €90m settlement which came as compensation when a customer pulled out of a long term contract in May.
However, two other long term contract customers are also attempting to pull out of business and have been taken to the International Court of Arbitration by Crystalox who admit that one of the companies will probably not have financial resources to fully settle its claim.
The decline of the company last year is just one chapter of a bigger story which has seen the renewable energy company’s profits steadily falling over the last four years. Crystalox boasted revenues of €274m in 2008.
The global company, which is based in the UK, has indicated that it will try to conserve cash and wait for improvement in the market.
As a result, the firm’s main factory in Germany, Bitterifeld, has had production suspended and will remain in a state of disuse until an improvement in the polysilicon market.
Crystalox chief executive officer Iain Dorrity, commented: “Trading conditions during the first half of 2012 have been extremely challenging and this has had a significant impact on our trading performance.
“Looking forward, the intensely competitive market conditions are not expected to improve in the short term and so we continue with our cash conservation strategy.”
At 12.08 GMT, PV Crystalox’s shares were trading at 7.9 pence, down 5.42% from the previous close.
PV Crystalox shares have fallen around 50% in the last year.