FRANKFURT (Reuters) - German solar company Q-Cells joined rivals in forecasting a growing industry in 2011 even though it shied away from giving an earnings outlook as lower subsidies in key markets highlight ongoing uncertainty for the sector.
Earlier this month, German peer SolarWorld, China’s Yingli Green Energy and U.S.-based SunPower gave a positive view on the ongoing business year, lifting shares in the sector which booked a record year in 2010, mainly due to ballooning demand in Germany, the world’s biggest market.
But cuts in subsidies by the German government are expected to dampen demand, forcing industry players to look for growth in markets outside Germany such as the United States, Italy and France and raising questions whether the global market will grow compared to last year.
“Critical voices we’ve heard last year about the market in 2011 are softening,” Q-Cells Chief Executive Nedim Cen told reporters in a conference call, adding he expected the market to grow this year.
Cen refrained from giving a concrete outlook for the company, saying only that business would be challenging and that the company would give a clearer outlook for the year at its annual press conference in March.
DZ Bank analyst Sven Kuerten, keeping a “sell” rating on the stock, said the fact that no outlook was given was highlighting the industry’s short-term uncertainty. Shares in the Q-Cells were 4.4 percent lower at 0817 GMT, while the FTSE cleantech index dropped 1.1 percent.
Q-Cells shares are still up 26 percent year-to-date.
Cen said that the company’s export rate stood at 67 percent, higher than the 2010 average of more than 50 percent, and that Q-Cells would further expand its exposure to markets such as the United States and Canada.
The solar industry is depending on government support as power generated from sun rays is still up to eight times as expensive as fossil-fuel based energy.
Q-Cells, the world’s fifth-largest maker of solar cells, reported fourth-quarter earnings before interest and tax (EBIT) of 27.7 million euros ($37.86 million), while sales came in at 387 million, both beating analyst estimates.
Editing by Jon Loades-Carter and Louise Heavens