German Q-Cells to move solar cell production to Malaysia on falling prices, write-offs

Aug 10, 2011 - German solar firm Q-Cells (ETR:QCE) plans to move most of its solar cell production to Malaysia from Germany after falling solar-cell prices and write-offs on production sites and inventories resulted in a big second-quarter operating loss.

Capacities for production of solar cells at the core plant in Bitterfeld-Wolfen, eastern Germany, will be halved and administration costs will be cut by 25% to 30% as the production site is no longer competitive compared with rivals from China, Q-Cells said on Wednesday.

The measures, aimed at improving Q-Cells' cost positions and further developing the core businesses Residential and Commercial & Industrial, are expected to help Q-Cells book a positive operating result again in 2012.

Q-Cell's second-quarter net loss amounted to EUR 354.8 million (USD 502.7m) as one-off effects such as write-offs on plants weighted down the result by EUR 256.5 million. In the first quarter of 2011, the solar cell maker booked a loss of EUR 41.1 million.

Beside one-time effects, costs resulting from low capacity utilisation and fall in the prices led to an operating loss of EUR 307.7 million in the second quarter compared with a loss of EUR 10.6 million in the first quarter of 2011.

Revenues from April to June jumped to EUR 316 million from EUR 125.1 million in the first quarter of 2011, mainly due to strong systems business.

In 2011, Q-Cells expects revenues of around EUR 1 billion and an operating loss in the three-digit million euro range, as the planned business realignment measures will burden the second-half performance.

(EUR 1.0 = USD 1.417)

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