18 August 2011 – interim results

The first half of 2011 saw a strong performance from the group, which is one of the world’s leading suppliers of photovoltaic silicon wafers.  Wafer shipment volume rose by 23% and revenues rose by 16% to €129.6m (2010: €111.7m).  Pre-tax profits rose to €24.6m (2010: €9.5m) for earnings per share of 4.5 cents (2010: 1.6 cents).  Net cash at the end of June was €41.3m (31 December 2010: €54.8m).  However, although these were excellent results given the reduced global demand for silicon wafers, pricing pressures which were experienced towards the end of the first half and which caused the profits warning in May continue.  As a result, the company is currently operating below breakeven and an operating loss is expected in the second half.  Nevertheless, looking further ahead, when the market recovers the group should be well placed to benefit and we would certainly not be sellers of the stock, especially given the strong cash position.  Although it may be too early to buy for recovery, the shares are a FIRM HOLD.