The solar section of MEMC‘s figures was scribed in red ink nevertheless with falling revenues contrasting with the opposite performance from the company’s traditional electronics semiconductor business an industry itself suffering headwinds at the moment.
But the impact on the balance sheet, though noticeable, was put down to a corporate decision to slow the solar project development business which MEMC turned to as external demand for polysilicon fell, in 2012.
Apparently MEMC has seen enough positive signs in solar to start cranking up project development this year, with 104 MW of new projects started from January to March 2013, compared to just 38 MW in the final three months of 2012.
"Sales in our Solar Energy segment were soft due to a downward adjustment of our development spending rate last year," said MEMC chief executive Ahmad Chatila, announcing the figures. "We expect the recent increase in construction activity to produce better results later this year. In addition, during the quarter we grew both our pipeline and backlog."
MEMC is predicting solar system sales of between 29 MW and 54 MW from April to June and between 430 and 500 MW for the full year with average project prices of $3.40 to $3.55/Watt this quarter, falling to $3.10 to $3.40/Watt over the 12 months.
So much for the future, this quarter’s disappointing solar figures amounted to a 43% tumble in solar revenue, from $372.2 million to $213.8 million, quarter on quarter, which is a 29% fall from the $303.2 million revenue seen in the opening three months of 2012.
That revenue fall adds up to a net operating loss of $10.8 million, compared to a $91.8 million profit for the period October to December 2012 although that sobering performance at least saw losses come in from the $17.1 million which went out of the company in Q1, 2012.
The poorer performance was down in part, the company says, to a change in the nature of projects it is developing with MEMC asked to perform EPC only, in project development, leading to a reduction in income compared to projects where it takes care of every aspect of solar power plants.
MEMC’s balance sheet showed a predictable hit from solar as a result with cash and cash equivalents falling from $572.6 million to $421.6 million quarter on quarter and, for the same comparison, whilst total liabilities stayed at $4.02 billion, total assets fell from $4.70 billion to $4.55 billion.