UPDATE 1-Conergy aims to cancel MEMC contract

* Annual net loss from discontinued ops increased

* Says Q1 revenue was 65 mln eur

* Says will be difficult to repeat 2008 revenue in 2009 (Adds details, background)

FRANKFURT, April 20 (Reuters) - German solar company Conergy CGYG.DE said late on Monday it is aiming to cancel its wafer supply contract with U.S. MEMC Electronic Materials (WFR.N) and signalled it may be difficult to repeat last year's sales in 2009.

Conergy -- which was originally scheduled to hold its annual news conference on March 27 -- delayed the event last month due to negotiations with MEMC and now said that it would aim to cancel the contract "using legal means if necessary."

Under the contract, which was concluded late 2007, MEMC supplies solar wafers to Conergy over a 10-year period, with pre-determined pricing, on a take or pay basis starting in the third quarter of 2008.

The original volume of $7 billion to 8 billion was later almost halved to $4 billion by Conergy and analysts have repeatedly said that the contract contains unfavourable clauses for the company.

Conergy wanted to renegotiate the contract due to "significant changes in the economic environment, particularly the very rapid swing from a seller's to a buyer's market," it said.

The solar sector has been hit by massive price decreases for cells, modules and wafer, affecting module and cell making peers such as Solon (SOOG.DE) and Q-Cells (QCEG.DE).

Conergy said it has authorised its supervisory board to "take legal action contesting the supply contract no later than the end of April, if an amicable agreement cannot be reached in the next few days."

Due to writedowns of prepayments, which Conergy made in mid-2008 in connection with the contract, it said its annual loss from discontinued operations for 2008 now stands at 307 million euros ($398.4 million), compared with the 252 million euros it gave in early March when it presented preliminary results.

Conergy -- which is currently in the process of restructuring -- also said that business in the first quarter was below expectations and that sales for the first three months came in at 65 million euros.

"Accordingly, the management board assumes that it will be very difficult to maintain revenue this year at the same level as in 2008," Conergy said in a statement.

The company in posted 1.01 billion euros of revenue in 2008. (Reporting by Christoph Steitz; Editing by Steve Orlofsky)