A very happy New Year to all shareholders, and great Q4 results soon to come.
Shorters and de-rampers, crowding this board, beware. In only five weeks time we reach a date three months on from publication of Q3 results. That may be the moment for Q4 and FY 06 Results, otherwise Q4 may be held back a week or two more whilst the auditors report on the FY.
Expect to see results some 40+% higher than on 8 November, for earnings and eps, on which to build confidence and expectations for 2007, and the next step to 700p after Q2.
As often pointed out this business is unusually visible to read ahead of time. The shortage of polysilicon has led to fixed sales contracts, fixed supplies, and well signalled production capacity increases. Overheads are extremely low so that there are not many economies of scale, and the sales contracts ensure predictable price yields per unit sold. So margins are also more visible than usual.
The only surprises may come from operating efficiencies out of engineered cost reductions. In this case by bringing the wafer slicing in-house and reducing - as the company has told us - the cost per wafer by 40 cents. Only 5/25 slicers will have been operational throughout Q4 yielding savings of $0.66m at $0.40/wafer on 1.66m wafers; but more than five times that figure - $3.33m in Q1 '07 - if confirmed with the FY results that that all is on schedule
That 40+% is the target increase in production capacity from 13MW actual output in Q3 to 18MW forecast by the company
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