SiC Processing GmbH
SiC Processing GmbH: SiC Processing with revenue decline in the first half of 2012 compared to the previous year; Norwegian customer REC Wafer Norway AS files for bankruptcy; continued shift of group revenues toward Asia
SiC Processing GmbH / Key word(s): Half Year Results 16.08.2012 / 17:17 --------------------------------------------------------------------- Hirschau, 16.08.2012 - The solar industry is currently going through difficult times. Recent industry news has reflected losses, declining prices and insolvencies. Especially for European solar manufacturers and suppliers, the current environment is very challenging. Due to the developments in the solar industry, SiC Processing's revenues in the first half of 2012 were 25% lower than in the same period of the previous year. Group revenues (on a preliminary basis)amounted to EUR 68 million in the first half of 2012 compared to EUR 91 million in the same period of the previous year. Group EBITDA (on a preliminary basis) was EUR 21.9 million in the first half of 2012, compared to EUR 30.3 million in the first half of 2011. Of the group EBITDA in the first half of 2012, EUR 11.4 million was generated by the now-dormant sites in Herøya and Glomfjord, Norway, which were shut down in the first half of 2012. These sites had been operated by a Norwegian subsidiary of SiC Processing, SiC Processing AS, for supplying the customer REC Wafer Norway. The group result (on a preliminary basis) for the first half of 2012 amounted to EUR -6.8 million, compared to EUR 9.5 million in the same period of the prior year. The result for the first half of 2012 includes a loss of EUR 6.1 million on the Norwegian subsidiary SiC Processing AS (including its subsidiary SiC Processing Property AS), which resulted from an unscheduled write-down of the now-dormant technical facilities and machines in the amount of EUR 12.8 million. The decrease in group revenues compared to the first half of 2011 resulted mainly from reduced levels of business at the Bautzen site, which have grown out of the difficult market situation for the European solar industry. The complete shut-down of the production sites in Herøya and Glomfjord, Norway during the first half of 2012 also contributed significantly to this decrease. After expiry of the short-term work program (Kurzarbeit) on 30 September 2012, the headcount at the Bautzen site will be adjusted to account for the lower utilization. All employees of the sites in Herøya and Glomfjord were notified at the end of April 2012 that their employment would terminate on 31 August 2012. On 13 August 2012, the management board of REC ASA resolved to cease providing financial support to its subsidiary REC Wafer Norway AS. The management of REC Wafer Norway AS, which had been the sole customer of SiC Processing AS, consequently filed for insolvency with the administrative court of Porsgrunn, Norway on 14 August 2012. The agreement between SiC Processing AS and REC Wafer Norway AS provides that REC Wafer Norway AS will reimburse SiC Processing AS over the entire duration of the agreement (depending upon the site, through 2018 or 2019) for all costs of the processing facilities constructed there and will additionally pay a fixed margin on all slurry that is processed at the sites. The costs yet to be reimbursed by REC Wafer Norway AS over the duration of the agreement, calculated since the last payment received from REC Wafer Norway AS in late June 2012, amount to approximately NOK 1,000 million (approximately EUR 137 million). Whether and in what amounts SiC Processing AS will receive further payments from REC Wafer Norway AS is currently uncertain. A payment default by REC Wafer Norway AS could cause SiC Processing AS likewise to be forced to file for insolvency and to use all of its existing cash and cash equivalents, which currently amount to around NOK 247 million (approximately EUR 34 million) to partially satisfy existing long-term rental and leasing obligations. In addition, in this event one of the lessors could exercise its rights under a rental default guarantee against SiC Processing GmbH, Hirschau, in the amount of approximately NOK 54 million (around EUR 7.4 million). Further financial consequences for SiC Processing GmbH, its creditors or creditors of its other subsidiaries are not currently foreseen. Overall, group sales will further shift to Asia due to capacity expansion in this region. Despite the difficult market conditions, SiC Processing is pursuing its expansion plans in Asia as planned. After the commissioning of production lines 5 and 6 in June and July 2012, the Zhenjiang production site now has an annual production capacity of 90,000 tons. In Baoding, production line 6 was successfully commissioned in May 2012. As a result, the Baoding site now also has an annual production capacity of 90,000 tons. Total annual capacity in China will rise to 234,000 tons as soon as lines 1 and 2 at the new site in Jingdezhen are commissioned in the second half of 2012. The annual production capacity of SiC Processing will then reach 290,000 tons, not including the closed-down operations in Norway with a capacity of 100,000 tons. The half year report for 2012 will be published on our website in September 2012 and the rating update will be published on our website in August 2012. Please register at our website http://www.sic-processing.com/index.php/Newsletter.html to automatically receive the latest news of SiC Processing group. SiC Processing GmbH SiC Processing GmbH is the leading provider for the recovery of used slurry from the photovoltaic and the semiconductor industry. With about 900 employees worldwide the group is located in 5 countries all over the world - production sites in Germany, China, Norway and US - Sales Office in Italy. The founder family holds a 25% stake beside the majority shareholder Nordic Capital Fund VII. Press Contact: Markus Kreuzer Head of Marketing and Communications Phone: 0049 (0) 9622 - 70 39 273 E-Mail: markus.kreuzer@sic-processing.de End of Corporate News --------------------------------------------------------------------- 16.08.2012 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- 181988 16.08.2012
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