Q-Cells announces second quarter market drop

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Q-Cells SE has announced a drop in its full-year sales outlook after prices fell sharply in the second quarter, this throws off hopes of a recovery and is sending shares across the sector lower.

Solar cell makers have been hit by a steep decline in prices for cells in 2009. This has been caused by an oversupply that built up during the boom years of 2007 and 2008. Q-Cells Chief Executive Anton Milner said, “Prices accelerated down in the second quarter.”

“(The case of) Q-Cells is more problematic since it suggests the company has problems with the Asian competition that can produce at much lower prices,” added Philippe de Weck, fund manager at Pictet, who is managing the company’s Clean Energy fund.

Q-Cells announced that it no longer expects sales to reach €1.3 billion to €1.6 billion, adding that it was not possible to make a reliable forecast.

The company said second-quarter sales fell to €142 million from €310 million a year ago, posting a loss before interest and tax of €62 million, down from a profit of €60 million.

The warning from Q-Cells, a recent profit warning from industry flagship Phoenix Solar as well as negative statements by LDK Solar have raised concerns that a positive outlook for next year might not be based on concrete evidence. 

Q-Cells recently raised €780 million in cash by issuing a convertible bond as well as selling a 17.2% stake in Norwegian peer REC.

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