Q-Cells paints bleak second quarter

The world’s largest producer of solar cells this week hinted at a very unsatisfying second business quarter, saying that because of this it would be impossible to attain the previous growth targets it has made for 2009.

Based on its preliminary Q2 data, German solar cell company Q-Cells SE said lower sales volumes, the postponement to the third quarter of a large-scale project and the downward trend in solar cell prices resulted in a weak quarter.

Because of this, Q-Cells said it was making no revenue and production forecasts for the rest of the year where it sees an “uncertain” market situation.

According to preliminary calculations, Q-Cells said revenue in the second quarter was only at around €142 million ($200 million), down 37% from €225 million in the first quarter.

There was also a sharp decline in Q-Cells’ operating income, which stood at a negative €62 million compared with €15 million in the first quarter.

Although Q-Cells said it has considerable financial reserves of some €520 million as of June 30, 2009, and expects recovery in market volume in the second half of the year, the company said it generally expects a “tough” market environment for the rest of 2009.

“Furthermore, the company expects the project business still to be largely dependent on the development of the financial markets. From a current standpoint, it will not be possible to attain the revenue and production levels which had been anticipated for the current business year,” Q-Cells said.

In May, Q-Cells scaled down its 2009 revenue projection of €1.7-2.1 billion to €1.3-1.6 billion due to the same “uncertainty” in the solar market, where the financial crisis has restricted banks’ ability to lend. In production terms, growth was scaled down to between 600 megawatts (MW) to 800 MW, from the previous 800 MW to one gigawatt projection.

Q-Cells said the company management will conduct a comprehensive package of measures to address the situation. This includes the reduction of capital investments for the year and more cost-cutting programs, among others.

Q-Cells said it will also push for project business by cooperating more closely with its financing partners. Q-Cells will deliver its final half-year results on August 13, 2009.


- Eric Dorente