Wacker’s polysilicon division dives to €55 million loss in 2019

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
The company said that the impairment charge included the “company's subdued expectations about future price developments for solar-grade polysilicon.” Image: Wacker

Major polysilicon producer Wacker Chemie has reported preliminary full-year 2019 financial results, highlighting higher than previously guided asset impairment charges on its polysilicon division as ASPs (Average Selling Price) remain at record lows leading to an EBITDA loss of €55 million.

Wacker said that its polysilicon division posted sales of €780 million in 2019, down from €824 million in 2018, a 5% decline, despite unspecified strong polysilicon volume growth. The key factor in the decline of revenue was ASP declines that are remaining at industry record lows, due primarily to major production capacity expansions in China in a well-know bid to become self-sufficient in polysilicon production for the PV and semiconductor industries. 

Wacker’s polysilicon division sunk to a preliminary EBITDA loss of €55 million in 2019, a 24% decline from an EBITDA of €72.4 million in 2018, which in turn had been a 75% decline from 2017.

However, the EBITDA loss would have been much higher without the one-time benefit of an insurance payment in the third quarter of 2019, related to an explosion and fire at its polysilicon plant in Charleston, US, which lifted EBITDA by €112.5 million. This also helped offset polysilicon inventory write downs. 

At the group level, Wacker had recently announced an impairment charge on its polysilicon production facility assets to the tune of €750 million, although this was increased to €760 million in the preliminary full-year results. 

The company said that the impairment charge included the “company's subdued expectations about future price developments for solar-grade polysilicon.”

Total group depreciation in 2019 was said to amount to around €1.32 billion, resulting in a total negative EBITDA of €630 million, compared to €260 million EBITDA in 2018. Total group revenue was €4.93 billion.

Wacker Group CEO, Rudolf Staudigl said “Our earnings last year were strongly influenced by non-recurring effects from insurance compensation received and from the impairment charge on fixed assets. In operating terms, especially our chemical business continued to perform well. Underlying conditions, however, remained unsatisfactory for solar-grade polysilicon, where prices fell markedly last year amid high overcapacity built up by state-subsidized competitors in China. We are currently working on a comprehensive program to make WACKER more efficient and capable, and to achieve substantial cost savings. We expect already to announce concrete targets for this initiative in Q1 2020.”

Wacker Chemie is expected to publish its annual report for the 2019 fiscal year on March 17, 2020.

Read Next

September 16, 2021
As much as 191GW of new solar PV is expected to be installed this year – up by a third on last year’s deployment figure – despite polysilicon and module prices remaining high into 2022, BloombergNEF has said.
September 15, 2021
Leading ‘Solar Module Super League’ manufacturer JinkoSolar has said it is addressing the reliability of shipments to the US market, while also upgrading its module capacity forecast for this year and teasing an expansion of n-type cell capacity.
PV Tech Premium
September 13, 2021
Following the release of the US Department’s Solar Futures Study, Liam Stoker assesses the downstream and upstream trends that must be realised for US solar to fulfil its potential.
September 1, 2021
Solar manufacturer Tongwei increased the prices of its cells for the second time in a month on Monday, with polysilicon pricing also edging upwards this week.
September 1, 2021
The new edition of PV Tech Power is now available to download, including comprehensive coverage of supply chain issues disrupting the solar sector, learnings from our bankability ratings and much more.
August 31, 2021
LONGi Solar recorded a 21% leap in net profit in the first half of the year despite what it described as a “moderate” adjustment to capacity utilisation rates in the wake of market demand.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
BRISTOL, UK
Solar Media Events
December 1, 2021