German solar giant Q-Cells SE (QCE.DE) announced continuing losses in 2Q09 and a set of measures the company hopes will improve fiscal performance.
In the first six months of 2009, the company reported an operating loss of EUR 47.6 million compared to a profit of EUR 119.1 million in the same period a year ago.
Influenced by a further write-down in connection with the sale of its share in Renewable Energy Corporation ASA (REC.OL) in May, the period loss incurred for the first half of 2009 was EUR 696.9 million.
Production has remained almost constant at 272.2 megawatts-peak(MWp), while sales fell to EUR 366.2 million from EUR 579.5 million a year ago.
Q-Cells said its business was harmed by negative pricing trends in the industry and reduced customer volumes.
“The business performance shows how quickly and dramatically the markets have changed for us. In order to take rapid and comprehensive countermeasures, we have developed Q-Cells Reloaded, a three-tier set of measures with which we will adapt Q-Cells to market conditions which have structurally changed. The aim is to grow profitably at a sustainable rate again in the medium term,” said Anton Milner, CEO of Q-Cells SE.
As a result of the oversupply of silicon wafers, the market price for this preliminary product in the short-term has, since the beginning of the year, been below the price level that Q-Cells agreed with its suppliers in its contracts for 2009. In the first half year alone this resulted in a competitive disadvantage of around EUR 50 million. Q-Cells said in 2010 the contracts will be brought into line with the market price so that this disadvantage will largely be eliminated.
Q-Cells Board has also decided to shut down older production lines in Thalheim, Germany, which operate at costs about 30% above international competition due to lower scale production levels and older technology. Q-Cells said around 500 solar jobs will be cut permanently.
Within its technology portfolio, Q-Cells said it will concentrate on the thin-film companies Solibro (CIGS) and Calyxo (CdTe) in which it holds a controlling interest. The Executive Board of Q Cells has requested that Calyxo proves its technological potential in mass production by the end of 2009. The efficiency of Solibro’s best thin layer modules has most recently been 11.7%. Solibro started mass production in 2008 and has since then produced about 9 MWp of thin-film modules. For its other investments, Q-Cells said it will continue working with partners to further expand these companies.
Q-Cells said all investment projects, especially those for 2010, will be reviewed again and the capital commitment in projects and stocks reduced. In contrast to the original plan, Q-Cells expects a reduced outlay of up to €300 million.
"With the change in the photovoltaic markets, new sectors and regions will also open up,"the company said in a release. In addition to its core business Q-Cells said it plans to engage more in systems integration by building on the project development business of Q-Cells International, which has been a growth leader within the company.
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The second quarter has been rough across the board for German solar companies. However, Reuters reports that it has been easier on firms closer to the end user.
Read the report at the link below.
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