PVCS Pv Crystalox Solar Plc

TIDMPVCS

RNS Number : 6247D

PV Crystalox Solar PLC

18 May 2012

PV Crystalox Solar PLC

18 May 2012

Interim Management Statement

This announcement is provided in accordance with the UK Listing Authority's Disclosure and Transparency Rules, for the period from 1 January 2012 to the date of this announcement.

Trading conditions remain extremely challenging, with significant industry overcapacity and high inventory levels maintaining the intense pressure on prices which developed during last year. Spot wafer prices have fallen by 70% since April 2011 and are below industry production costs.

As a result of this adverse pricing environment we have to date been unable to reach agreement on acceptable wafer prices and volumes for Q2 2012 with some of our contract customers. Consequently shipment volumes during the first half of the year are now expected to be in the range 55 to 70MW, which is below our earlier expectation of 80-100MW

In the light of these continuing difficult market conditions the board remains committed to the cash conservation strategy which we announced in October 2011. Accordingly, the Group continues to operate at reduced wafer production levels and polysilicon production remains suspended at the Group's facility at Bitterfeld. In parallel the Group is accelerating its cost reduction programmes.

As previously disclosed, the Group has been negotiating compensation for the termination of a long term wafer supply contract. A satisfactory agreement has now been reached and this will result in a cash settlement of approximately EUR90m before tax, which the Group will receive and recognise as income during H1 2012.

The Group continues to believe that the medium-to long term outlook for solar installations is positive and therefore protecting the Group's capabilities and cash for the future remains of paramount importance. The Board will continue to review industry conditions on an ongoing basis in order to maintain the best interests of shareholders.

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

Tracey Bowditch

This information is provided by RNS

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