EANS-News: Sunways AG: Weaker than expected demand in the first months of 2011
· Preliminary sales of 22.2 million in the first quarter 2011; gross performance expected to amount to 44.3 million · Operating result (EBIT) in the first quarter 2011 expected to be 3.5 million · Demand and price-related adjustment of prognosis for the fiscal year
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Earnings Forecast/quarterly report/3-month report
Subtitle: · Preliminary sales of 22.2 million in the first quarter 2011; gross performance expected to amount to 44.3 million · Operating result (EBIT) in the first quarter 2011 expected to be 3.5 million · Demand and price-related adjustment of prognosis for the fiscal year
Konstanz (euro adhoc) - 4 May 2011 - Based on preliminary figures, Sunways AG (SWW:GR, SWWG.DE, ISIN DE0007332207) generated sales of EUR 22.2 million in the first quarter of the current year (Q1/2010: EUR 44.3 million). This decline in sales against the prior year was due to the weaker than expected demand for the company´s photovoltaic components and solar systems. On the other hand, gross performance in the first quarter is expected to amount to EUR 44.3 million and thus to about 90 percent of the corresponding figure for the first quarter 2010. The international contribution to quarterly sales was about 58 percent (Q1/2010: 16 percent). Based on preliminary figures, the operating result (EBIT) in the first three months of the current year amounted to EUR -3.5 million (2010: EUR 4.7 million).
The weak sales development in the past quarter was mainly due to weak market demand and the resulting unexpectedly high inventory levels at various levels of trade. As a result of the at times very limited availability of solar modules and in particular solar inverters in the past year, wholesalers and installers had built up inventories towards the year-end which were not sufficiently reduced due to the weak demand in the first months of the current year.
Michael Wilhelm, Chairman of the Management Board of Sunways AG: "In the context of our planning for 2011 we had - against the background of the strong prior year and the further reduction of feed-in tariffs in Germany as of 1 January 2011 - already expected a weak start to the year and a negative operating result for the first three months. However, as a result of the unexpectedly high inventory levels of dealers and hesitant demand, the operating result generated in the first quarter was below our expectations."
In addition, the cell shipments to LDK Solar were of major importance to Sunways Group´s gross performance in the first three months. The solar cells supplied form the basis for the development of the module production cooperation with LDK Solar commenced in late 2010. Hence, these shipments result from the strategic change in business model started in 2010. Due to the favorable cost structure, the modules´ segment competitive position is going to be sustainably improved.
Against the background of the markedly weaker than expected demand during the first months of the current year, also from the European growth markets, together with the high supply volume and resulting pressure on prices, Sunways does not expect to be able to reach the sales growth in the double-digit percentage range originally targeted for the fiscal year 2011. Sunways will, however, adhere to its earnings target and still anticipates to generate an EBIT margin in the lower single-digit percentage range.
"In order to reach our earnings target for the current year, we will promptly take all measures on the sales side as well as with regard to costs," says Michael Wilhelm, Chairman of the Management Board of Sunways AG.
All figures in this press release are preliminary and unaudited. The final results for the first quarter will be published on 12 May 2011.
Financial calendar 2011 12/05/2011 - Interim report as of 31 March 2011 (Q1) 16/06/2011 - Annual General Meeting 11/08/2011 - Interim report as of 30 June 2011 (Q2) 14/11/2011 - Interim report as of 30 September 2011 (Q3)
This press release is also available on www.sunways.eu/en as well as at http://www.presseportal.de/pm/57666/sunways_ag.
Forward-looking statements This press release contains statements relating to the future business development of Sunways AG that are based on management assumptions and estimates made at the time of publication. Should the assumptions underlying the prognoses fail to be fulfilled, actual events may vary substantially from forward-looking statements. Uncertainties include changes in the political, legal, economic and business environment, exchange and interest rate fluctuations as well as the behaviour of competitors and other market participants. Sunways does not intend and is not under any obligation to update forward-looking statements on an ongoing basis as these are exclusively based on the circumstances prevailing as of the date of publication.
About Sunways Sunways AG, Konstanz/Germany, stands for consistent use of solar energy to secure long-term energy supply of man in an efficient and sustainable manner. Sunways offers technological competence, performance and highest quality - from single components to complete solar systems. Since its foundation in 1993, Sunways AG evolved into a technology leader in the photovoltaics industry serving international markets. With silicon-based solar cells, inverters, solar modules and solar systems, the company offers all components required for high-yield photovoltaic power generation. With photovoltaic solutions tailored to customers´ needs (transparent and coloured solar cells, building- integrated photovoltaic installations), Sunways turns exceptional ideas into reality. Sunways Production GmbH in Arnstadt/Germany is a subsidiary of Sunways AG; in addition, the group has own branch offices in Barcelone/Spain and Bologna/Italy. In 2010, Sunways AG with about 340 employees realised sales of around EUR 220 million.The shares of Sunways AG are listed at the Frankfurt Stock Exchange (SWW:GR, SWWG.DE, ISIN DE0007332207). For further information, please visit www.sunways.eu/en
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Contact:
Dr. Harald F. Schäfer
Head of Corporate Communications & Investor Relations
Tel.: +49 (0)7531 996 77-415
E-Mail: communications@sunways.de
Branche: Alternative energy
ISIN: DE0007332207
WKN: 733220
Index: CDAX, Prime All Share, Technology All Share
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Hamburg / free trade
Stuttgart / free trade
Düsseldorf / free trade
München / free trade