EANS-News: Sunways AG Third quarter also affected by deterioration of prices
and weak demand
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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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Earnings Forecast/9-month report
Subtitle: - Difficult conditions continue to prevail in the photovoltaics market
- Weak domestic demand partially offset by sales in other EU markets
- Sales and operating result continue to fall due to declining prices
Konstanz/Germany (euro adhoc) - 14 November 2011 - The situation in the European
photovoltaics markets continues to be strained. The recovery in demand expected
by many experts failed to occur in the third quarter. These factors also had an
impact on the sales and earnings development of Sunways AG (SWW:GR, SWWG.DE,
ISIN DE0007332207). Compared to the successful prior year quarter, consolidated
sales declined by EUR 35.0 million to EUR 23.3 million (Q3/2010: EUR 58.3
million). Although the weak demand in the German core market was partially
offset by sales generated in the other European markets, the continuously
massive pressure on selling prices for photovoltaic components due to worldwide
excess capacities as well as write-downs on inventories and provisions for
impending losses in the aggregate amount of EUR 6.3 million resulted in a
negative operating result (EBIT) of EUR -11.8 million Q3/2010: EUR 4.0 million).
Earnings development in the first nine months of the fiscal year 2011 was mainly
due to the price-related decrease in gross margins. In particular, realizable
selling prices dropped by more than 30 percent in the solar module segment. In
addition, the ongoing public debate over future subsidies for solar energy as
well as the exacerbating debt crisis in various European countries led to a
continuous, palpable buying restraint on the part of private consumers and
investors in Germany and abroad.
Successful international business due to internationalization strategy
In the third quarter 2011, Sunways generated sales in other European countries
in the amount of EUR 9.9 million (Q3/2010: EUR 16.8 million). Thus the
percentage share of total consolidated sales attributable to non-domestic
European operations increased from 28.8 percent to 42.5 percent. The most
important sales markets outside Germany were again Italy and France, in
particular with respect to solar modules. The sales revenues of Sunways in
France more than tripled from the prior year quarter to EUR 2.0 million
(Q2/2010: EUR 0.6 million), inter alia due to the distribution cooperation with
Wattsol S.A.R.L. In all, international sales so far generated in 2011 increased
to EUR 42.3 million (9M/2010: EUR 36.9 million) which corresponds to a 14.6
percent rise against the prior year. In the opinion of Sunways, this development
proves that the Company´s internationalization strategy and the expansion of its
distribution activities in Southern Europe are successful.
Solar module sales volumes continue to experience a positive development
In the third quarter, Sunways recorded a sales volume of 11.4 megawatts peak in
the solar module segment and generated corresponding sales of EUR 14.0 million
(Q3/2010: 11,3 megawatts peak, EUR 19.6 million) while selling prices were
reduced drastically. Due to the dramatic deterioration of prices for solar
modules , sales and earnings in this segment continued to decline in the first
nine months of the current fiscal year although the sales volume reported for
that period increased by 19.8 percent against the prior year period and
production costs were reduced markedly. In the solar inverter segment, the sales
volume of 38.9 megawatts peaks fell significantly behind the relevant figure
for prior year quarter of 68.0 megawatts peak. Sales revenues declined
overproportionately to EUR 7.3 million (Q3/2010: EUR 16.9 million).
The megawatt capacity sold in the solar cell segment also decreased markedly and
sales revenues dropped to EUR 12.1 million (Q3/2010: EUR 27.9 million).
Short-time work has been introduced at the Arnstadt plant in early September to
adjust production capacities to the current demand. Due to the rapid decline in
prices for solar cells and solar modules, the module production cooperation with
LDK Solar started in late 2010 had a negative impact on the operating result of
the solar module segment as realizable selling prices no longer covered cost
prices upon return of the solar modules. In 2011, Sunways supplied the vast
majority of its solar cells to LDK Solar for the production of Sunways solar
modules and thus accepted an extended value added period for cost reduction
reasons.
Outlook for 2011
In view of the ongoing difficult situation in the European photovoltaics
markets, Sunways anticipates a negative operating result for the fourth quarter
2011. The negative development of prices for photovoltaic products will result
in a significant decline in sales and earnings for the full fiscal year. Based
on the figures for the first three quarters and the prognoses for the remaining
weeks of the year, the Company expects to generate sales revenues of EUR 100 to
120 million for the fiscal year 2011. A negative operating result (EBIT) in the
lower double-digit million range is again to be expected for the fourth quarter.
"Sunways strongly focuses on restoring and securing the Company´s profitability
on a sustainable basis. The objective is to minimize any further negative
effects on our earnings and liquidity position. All measures already initiated
to reduce costs and ensure liquidity will be further intensified. Additional
projects relating to a review and potential adjustment of the business model
have already been started", says Michael Wilhelm, Chairman of the Management
Board of Sunways.
Q3/2011 key figures
Group
Sales revenues: EUR 23.3 million (Q3/2010: EUR 58.3 million)
EBITDA: EUR -10.2 million (Q3/2010: EUR 5.6 million)
EBIT: EUR -11.8 million (Q3/2010: EUR 4.0 million)
Consolidated net income/loss: EUR -8.7 million (Q3/2010: EUR 2.7 million)
Earnings per share: EUR -0.75 (Q3/2010: EUR 0.24)
Sales revenues Germany: EUR 13.4 million (Q3/2010: EUR 41.4 million)
Sales revenues rest of Europe: EUR 9.9 million (Q3/2010: EUR 16.8 million)
Employees (30/09/2011): 343 (30/09/2010: 333)
Solar cell segment
Sales revenues: EUR 12.1 million (Q3/2010: EUR 27.9 million)
EBIT: EUR -4.0 million (Q3/2010: EUR 2.1 million)
Sales volume: 12.1 MWp (Q3/2010: 24.5 MWp)
Solar module segment
Sales revenues: EUR 14.0 million (Q3/2010: EUR 19.6 million)
EBIT: EUR -5.9 million (Q3/2010: EUR -1.5 million)
Sales volume: 11.4 MWp (Q3/2010: 11.3 MWp)
Solar inverter segment
Sales revenues: EUR 7.3 million (Q3/2010: EUR 16.9 million)
EBIT: EUR -1.9 million (Q3/2010: EUR 3.4 million)
Sales volume: 38.9 MWp (Q3/2010: 68.0 MWp)
9M/2011 key figures
Group
Sales revenues: EUR 84.2 million (9M/2010: EUR 167.2 million)
EBITDA: EUR -16.7 million (9M/2010: EUR 18.4 million)
EBIT: EUR -21.6 million (9M/2010: EUR 13.7 million)
Consolidated net income/loss: EUR -11.1 million (9M/2010: EUR 8.3 million)
Earnings per share: EUR -0.96 (9M/2010: EUR 0.72)
Sales revenues Germany: EUR 42.0 million (9M/2010: EUR 130.3 million)
Sales revenues rest of Europe: EUR 42.3 million (9M/2010: EUR 31.0 million)
Solar cell segment
Sales revenues: EUR 46.1 million (9M/2010: EUR 80.8 million)
EBIT: EUR -6.9 million (9M/2010: EUR 9.1 million)
Sales volume: 45.9 MWp (9M/2010: 73.0 MWp)
Solar module segment
Sales revenues: EUR 59.5 million (9M/2010: EUR 68.0 million)
EBIT: EUR -10.5 million (9M/2010: EUR 0.0 million)
Sales volume: 44.8 MWp (9M/2010: 37.4 MWp)
Solar inverter segment
Sales revenues: EUR 18.4 million (9M/2010: EUR 35.8 million)
EBIT: EUR -4.2 million (9M/2010: EUR 4.6 million)
Sales volume: 89.7 MWp (9M/2010: 145.0 MWp)
Financial calender 2012
21/02/2012 - Preliminary sales 2011
30/03/2012 - Annual Report 2011 (FY 2011)
15/05/2012 - Interim report as of 31/03/2012 (Q1)
14/08/2012 - Interim report as of 30/06/2012 (Q2)
13/11/2012 - Interim report as of 30/09/2012 (Q3)
Further inquiry note:
Dr. Harald F. Schaefer
Head Corporate Communications and Investor Relations
Tel.: +49 (0)7531 996 77-415
E-Mail: communications@sunways.de
end of announcement euro adhoc
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company: Sunways AG
Macairestr. 3 - 5
D-78467 Konstanz
phone: +49 (0)7531 99677 0
FAX: +49 (0)7531 99677 10
mail: info@sunways.de
WWW: http://www.sunways.de
sector: Alternative energy
ISIN: DE0007332207
indexes: CDAX, Prime All Share, Technology All Share
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Berlin,
Hamburg, Stuttgart, Düsseldorf, München
language: English