Arise Technologies Corp has posted a $10.2 million first quarter loss mainly due to high raw material costs for prepayments made on purchases of silicon. The company’s sales also declined 61.9% to $7.2 million from the previous quarter. The economic downturn has led many of Arise’s customers to defer or cancel their orders.
Although the first quarter was grim the news for Arise is not all bad, Arise’s interim chief executive officer Vern Heinrichs expects business to pick up over the year, “although our customers have deferred purchases in the first quarter, they have assured us they will honour their long-term contracts”. Heinrich also talked about the improved efficiency in the company’s German plant. The plants second production line is complete and will be ready for when business picks up.
The company is also optimistic about Ontario’s proposed Green Energy Act. The energy act is expected to create a surge of solar projects in the province. Heinrich believes Arise is well positioned to gain a significant share of the market.
The company has put on hold the development of its silicon refinery in Kitchener, but has been looking for partners to help move the project forward. The company has also put on hold its search for a new chief executive officer.
Arise had $6.3 million in cash as of April 28 and expects to have sufficient funds to operate into the later part of the year. Arise Technologies shares closed Friday at 0.35 cents a share down 5.09%.