Q-Cells announces restructuring program; reduces cell production

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Following on from six months of woeful financial performance, brought on by weak market demand, changing solar incentives, and falling cell and module prices, the German photovoltaics manufacturer announced in a statement that it has "today agreed a realignment program and taken significant write-offs on tangible fixed assets and inventories".

Consequently, Q-Cells SE has announced that it has "permanently" slashed its production capacity for solar cells at its German headquarters by 50 percent, from 250 megawatts (MW) to 125 MW. To compensate, it says it will focus on production of high performance systems at its Malaysian factory, which is expected to reach nameplate capacity in the second half of this year.

Furthermore, the manufacturer says that between 25 and 30 percent of costs will be saved by "pooling tasks and streamlining the organizational structure and processes". While avoiding mentioning how many jobs will be affected, the statement says that Q-Cells "aims to avoid compulsory redundancies".

The figures

Q-Cells says it "significantly" increased its second quarter sales revenues from €125.1 million in the first quarter of 2011 to €316 million in the second, due mainly to a "strong" systems business. This is down on the same period 2010 however, where the second quarter reaped sales of €333.5 million, and the first half of the year saw €565.7 million generated.

Meanwhile, due to the difficult market conditions, the manufacturer suffered a hefty operating loss of €307.7 million in the second quarter. This means, overall, it lost €318.3 million in the first half of 2011. After interest and taxes, this loss increases to €354.8 million for the second quarter and €395.8 million for the first half.

For the full year, Q-Cells expects to generate sales revenues of around €1 billion and an operating loss in the three-digit million euro range. This, it says, is due to more "one-off effects for the planned package of measures in the second half of 2011".

As a result of its restructuring efforts, it says that it hopes to achieve a positive operating income (EBIT) again in 2012.

The news shows just how volatile the current market is. In announcing its first quarter results, Q-Cells was still positive about 2011, and stated that it expected to expand its module production capacity to 700 megawatts peak by the end of the year.

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