Bloomberg News

PV Crystalox Plummets in London After Cutting Sales Outlook

October 21, 2011

(Updates with closing share price in second paragraph.)

Oct. 21 (Bloomberg) -- PV Crystalox Solar Plc, a maker of components for solar panels, slumped to a record in London after reducing its sales outlook and announcing job cuts because of weaker-than-expected demand in Germany, the biggest panel market.

The stock fell 42 percent to 7.54 pence at the close of trading, the lowest since the shares were first sold in 2007. The Oxfordshire, U.K.-based manufacturer of silicon ingots and wafers has lost 86 percent of its value this year and is worth 31.4 million pounds ($50 million).

Solar-equipment makers are struggling to offset slumping demand in Europe, where Germany, France and Italy cut subsidies to cap booming installations. They’re also under pressure from Chinese manufacturers that expanded production capacity just as demand slowed, causing wafer, cell and module prices to plummet.

“It’s brutal out there,” said company Board Secretary Matthew Wethey in a phone interview. “Wafer prices have dropped 56 percent on the spot market since April.” Wafers are turned into solar cells, which are fastened to panels.

Tumbling prices across the supply chain have failed to provoke the pick-up in demand that the company anticipated. Full-year shipments of photovoltaic products will be in a range of 360 to 390 megawatts, down from the 400 to 450 megawatts forecast on Aug. 18, the company said today in a filing.

Weaker Recovery

“The anticipated recovery in PV end-market demand stimulated by lower module prices has been weaker than expected in the second half of 2011, particularly in Germany,” PV Crystalox said in the statement.

The company said it would temporarily suspend production at its polysilicon facility in Bitterfeld, Germany, and reduce output at its U.K. ingot and German wafer plants to cut costs. This will lead to “significant job losses” in the U.K. and short-time working in Germany, the company said.

Wethey couldn’t say how many jobs would be cut. PV Crystalox will go through a “consultation period” with its 140 employees in the U.K., he said.

Companies in the industry had hoped that Germany, which added a record 7,400 megawatts of panels last year, would see a sales jump in the third and fourth quarters before a feed-in- tariff reduction there in January. PV Crystalox said a year-end rally “does not appear to be materializing.”

--With assistance from David Altaner and Marc Roca in London. Editors: Stephen Cunningham, Alastair Reed

To contact the reporters on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net; Todd White in Madrid at twhite2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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