As Day4 Energy delivered some rather gloomy financial news for its first quarter 2011, the company announced that it would be supplying Solar Modules Netherlands (SMD) with the necessary components to upgrade its 25MW production facility. Seeing that Day 4 Energy’s revenues, sales and gross margins all took a dip from the prior quarter, news of SMN preparing for the manufacturing of the 60MC-I solar module with Day4 DNA technologies was a welcomed look to the future.
First quarter revenues amounted to CAN$18.9 million, a CAN$4 million drop from Q1 2010 and 67%, or CAN$38.8 million, from Q4 2010. Sales totaled CAN$2.9 million, which the company attributed to its 2010 acquisition of ACI ecoTec. Day4 Energy advised that its sales declined due to weak demand during Q1 because of the Italian FiT issues. Additionally, the gross margin, which was CAN$3.5 million, compared to CAN$4.7 million in Q4 2010, was impacted by lower production volumes and selling prices.
“There is little doubt that the first half of 2011 is shaping up to become one of the most challenging periods in the history of our industry. As a result of the Italian market essentially being frozen for a number of months inventory levels climbed across the PV value chain while material and product prices experienced a significant decline from late 2010 levels. Our operating results for the first quarter clearly reflect the challenges that we, as well as the rest of the industry, experienced over the last few months,” said George Rubin, President of Day4 Energy. “That being said, the highly competitive market that we are now facing provides both a challenge and an opportunity. The immediate impact on inventory and working capital management is a key challenge and we reacted to the demand disruption quickly by halting production and realigning our work force to reduce expenses and protect our working capital. In parallel we used this time period to accelerate the transition of our business to a technology and brand licensing model. With the market demanding competitive differentiation especially in the form of performance, we have a unique opportunity to capitalize on the growing interest in next generation technologies among PV cell and module manufacturers.”
However, as the Day4 Energy gets underway in its second quarter 2011, optimism surrounds the SMN deal. The upgrade on SMN’s facility will begin straightaway, with production set to start in mid-July. Solar modules produced under the collaboration will feature Day4’s DNA PV cell, which is said to replace the need for soldering. SMN’s 60MC-I module will feature Day4’s DNA technologies specifically engineered for the European market.
“With production set to begin just four weeks after initiation of the technology upgrade, SMN is well positioned to meet the growing demand of customers throughout Europe and take full advantage of the compelling product differentiation offered by Day4 DNA technology.” Noted Jac Hanssen, CEO of SMN.