North Coast Solar Stocks

June 24, 2009

5N Plus extends contract with First Solar, shares jump

Filed under: FSLR — Tags: , , , , — Jason @ 3:08 pm

Wed Jun 24, 2009 3:08pm EDT

* 5N Plus says First Solar extends supply contract by one year

* Says contract increases minimum quantity to be ordered

* 5N Plus shares up as much as 19 pct

By R. Manikandan

BANGALORE, June 24 (Reuters) – Canadian metals producer 5N Plus Inc said it extended supply agreements with solar panel maker First Solar Inc (FSLR) by one year, sending its shares up as much as 19 percent.

The supply agreements, under which 5N Plus provides cadmium telluride and cadmium sulphide to First Solar from its facilities in Montreal and Germany, were extended till July 31, 2013. Last August, the contract was extended till July 31, 2012.

The amended contract has increased the minimum prescribed quantities of cadmium telluride to be ordered by First Solar by 50 percent, 5N Plus said in a statement.

“I wasn’t surprised to see the extension, but the magnitude of 50 percent increase, I think that is a big surprise to me,” analyst Hendi Susanto of Gabelli and Co said by phone.

Susanto, who has a “buy” rating on 5N Plus stock, said First Solar accounts for 75 to 85 percent of 5N’s cadmium telluride sales. 5N Plus is one of the world’s biggest producer of cadmium telluride that is used to make solar modules.

“Many people have worried that First Solar’s demand is going to weaken in the near future but this news confirmed that First Solar is positive about their shipment projections for this year and years after,” Susanto said.

Solar power companies have been hit hard this year by a lack of access to financing for new projects and a global oversupply of panels that has sent prices on their products into a free fall.

For the third quarter ended Feb. 28, 5N’s profit surged 125 percent to C$5.1 million, with sales climbing 129 percent to C$19.2 million.

5N produces purified metals such as selenium, cadmium and tellurium along with compound materials such as cadmium telluride and cadmium sulphide.

Shares of 5N Plus were up 13 percent, or 68 Canadian cents, at C$6.05 in the afternoon trade on the Toronto Stock Exchange. They touched a high of C$6.38 earlier in the session.

(Editing by Ratul Ray Chaudhuri)

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