EANS-News: Sunways closes difficult 2011 fiscal year
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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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annual report/annual result/Financial Figures/Balance Sheet
Subtitle: - Sales in the fiscal year total 116.2 million
- Demand, deterioration of prices and non-recurrent expenses had a negative
impact on sales revenues and operating result
- New perspectives in international growth markets with the LDK Solar Group as
majority shareholder
Konstanz (euro adhoc) - 23 July 2012 - Sunways AG (SWW:GR, SWWG.DE, ISIN
DE0007332207) generated consolidated sales of EUR 116.2 million in the fiscal
year 2011 (2010: EUR 222.7 million). This slump in sales of about 50 percent
compared to the prior year was due to shifts in demand in the target markets
over large parts of the year as well as dramatic price declines for components
of photovoltaic systems, in particular solar modules (by up to 40 percent within
twelve months). The company incurred an operating loss (EBIT) for the fiscal
year 2011 in the amount of EUR 66.1 million (2010: EUR +15.0 million).
"2011 was an extremely difficult year for the entire German solar industry, a
fact which is also clearly reflected in our financial statements," says Michael
Wilhelm, Chairman of the Management Board of Sunways AG. "Non-recurrent expenses
in the context of the transaction with the LDK Solar Group also had a negative
impact on the operating result of Sunways. However, we have won a strategic
investor for the future who will open up new growth prospects for our company."
In addition, there were non-recurrent and extraordinary expenses in connection
with provisions for anticipated losses under wafer purchase contracts (Deutsche
Solar) and various agreements relating to the supply of inverters as well as
provisions for warranties and impairments of fixed assets. The operating result
of Sunways AG in the fourth quarter was strongly affected by expenses totaling
approximately EUR 44.0 million, approximately EUR 34.0 million thereof in the
form of transaction-related and other non-recurrent effects. In the fiscal year
2011, Sunways reported a consolidated net loss of EUR 62.1 million (2010:
consolidated net income of EUR 9.3 million). This corresponds to earnings per
share of EUR -5.35 (2010: EUR 0.80).
International sales have a stabilizing effect
Sunways was again able to markedly increase its export rate against the prior
year. A total of 45.4 percent of consolidated sales were generated abroad (2010:
29.2 percent); in absolute terms, this corresponds to sales revenues of EUR 52.7
million (2010: EUR 65.2 million). Thus the relevant sales revenues experienced a
slight decline, but all in all the internationalization of distribution
activities had a significant stabilizing effect on the Sunways Group's business
volume.
Declining sales revenues despite record level of solar module sales volumes
Solar module sales volumes rose again after the weak first quarter: with a sales
volume of 22.1 megawatts peak, the fourth quarter was even the strongest quarter
so far in the company's history. Overall, solar modules with a capacity of 66.8
megawatts peak were sold in 2011 (2010: 54 megawatts peak) - this corresponds to
a 23.7 percent growth over the prior year. However, despite the record level of
sales volumes, sales revenues declined to EUR 81.3 million due to the dramatic
deterioration of prices for solar modules (2010: EUR 96,0 million). Sales
revenues in the solar inverter segment aggregated to only EUR 27.5 million
(2010: 46,6 million) which corresponds to a decline by 41 percent. Similar to
the development of sales volumes in the solar module segment, inverter sales
volumes were at their weakest in the first quarter 2011 but recovered in the
course of the year.
LDK Solar as strategic investor
In the context of a capital increase resolved on 31 December 2011 and recorded
in the commercial register on 23 February 2012, LDK Solar Germany Holding GmbH
became the major individual shareholder of Sunways AG. On 13 February 2012, the
German subsidiary of the LDK Solar Group submitted a voluntary public takeover
offer to all Sunways shareholders. Upon expiration of the acceptance period on
12 April 2012, LDK Solar Germany Holding GmbH held approximately 70.88 percent
of the share capital.
LDK Solar Co., Ltd. (LDK:US, LDK.N, ISIN US50183L1070) is among the ten largest
photovoltaic companies worldwide in terms of sales revenues. Being the largest
fully integrated producer in the world of silicon, wafers, solar cells and solar
modules, LDK Solar has supplied raw materials to Sunways AG for many years and
cooperates with the company in the production of Sunways solar modules since
2010.
Management Board member Roland Burkhardt resigned
Roland Burkhardt, Management Board member Technology, Research and Development,
left Sunways AG of his own volition upon expiration of his employment contract
as of 31 March 2012. His responsibilities were divided between two existing
Management Board divisions. Research and development activities with respect to
solar inverters as well as quality assurance were assigned to the area of
responsibility of Michael Wilhelm, Chairman of the Management Board. Management
Board member Jörg von Strom is now also in charge of research and development
activities relating to solar cells and modules.
Transfer to the General Standard trading segment of the Frankfurt Stock Exchange
On 26 June 2012, the Supervisory Board of Sunways AG approved a Management Board
resolution on a transfer of the listing of the Sunways shares from the Prime
Standard to the General Standard trading segment of the Frankfurt Stock
Exchange. This change in trading segment serves to reduce the additional
expenses in connection with a listing in the Prime Standard. The decision to
revoke the admission to the Prime Standard was published by Deutsche Börse on
the internet on 11 July 2012. Thus such revocation will take effect as of the
end of 11 October 2012. Trading of the Sunways shares in the General Standard
will commence on 12 October 2012.
Premature termination of long-term supply contracts
On 18 July 2012, the Management Board of Sunways AG entered into an agreement
with Deutsche Solar GmbH on the modification and premature termination of two
long-term wafer purchase contracts. Under this agreement, Sunways waived the
remaining amount of about EUR 7.5 million of a prepayment already made. At the
same time, the parties agreed to modify the existing agreements, which provided
for wafer shipments until the end of 2018 or 2017, to the effect that Sunways
has to purchase a total wafer volume of approximately 60 megawatts in 2012 and
2013. If the renegotiated purchase commitments have been met in full by 31
December 2013, both contracts will be terminated by mutual agreement as of that
date.
Due to this agreement and the negative development of market prices since the
beginning of 2012, provisions for anticipated losses in a total amount of
approx. EUR 4.6 million were reported through profit and loss in the 2011
financial statements with respect to this contract modification. This agreement
constitutes an advantage for Sunways AG compared to a continuation of the
contracts on the initially agreed terms and conditions. "We are convinced that
the conclusion of the amendment agreement is in the economic interest of Sunways
since its positive effects in the medium and long term will markedly exceed its
short-term negative effects," says Michael Wilhelm.
The balance sheet effects of the amendment agreement with Deutsche Solar GmbH as
well as other losses incurred over recent months resulted in a loss equal to
more than half of the share capital of Sunways AG.
Outlook for 2012
"The situation in the global photovoltaics markets will not be alleviated in the
current year. 2012 is a year of transition for Sunways and the main goal is to
stabilize the development of sales volumes and sales revenues, to improve
earnings and to realize first visible successes in the context of our
cooperation with LDK Solar," says Michael Wilhelm, Chairman of the Management
Board.
In recent months, there were materials bottlenecks relating to module production
in China. Thus the availability of Sunways solar modules was limited in the
first two quarters of the current year. As a result of such shortages, Sunways
was also unable to fully utilize its solar cell production capacities which had
an adverse impact on gross profit. On the other hand, sales volumes of Sunways
solar inverters increased markedly. As a result of the decline in sales prices,
gross profit nevertheless dropped from the prior year figure. Due to the
pressure on margins in all segments that continued in the first half of 2012,
the operating result generated by the Sunways Group in the first two quarters
was negative.
Against the background of the takeover of a majority stake in Sunways and
current business developments, Sunways was able to reach an agreement with its
lending banks on reduced credit facilities that will run until September 2013.
"In addition, LDK Solar supported the funding activities of Sunways through
various instruments," explains Michael Wilhelm. In addition to the waiver of a
claim relating to a long-term liability, adequate payment terms were agreed with
respect to all goods and services sourced from China. Furthermore, Sunways has
received a letter of support from LDK Solar that will expire on 31 August 2014.
Key figures
Group
Sales revenues: EUR 116.2 million (2010: EUR 222.7 million)
EBIT: EUR -66.1 million (2010: EUR 15.0 million)
Consolidated net loss: EUR -62.1 million (2010: EUR 9.3 million)
Earnings per share: EUR -5.35 million (2010: EUR 0.80 million)
Number of employees (31 Dec 2011): 332 (2010: 344)
Solar cell segment
Sales revenues: EUR 60.2 million (2010: EUR 108.7 million)
EBIT: EUR -42.6 million (2010: EUR 11.2 million)
Solar cell sales volume: 64.9 megawatts peak (2010: 97.8 megawatts peak)
Solar module segment
Sales revenues: EUR 81.3 million (2010: EUR 96.0 million)
EBIT: EUR -13.7 million (2010: EUR -1.7 million)
Solar module sales volume: 66.8 megawatts peak (2010: 54 megawatts peak)
Solar inverter segment
Sales revenues: EUR 27.5 million (2010: EUR 46.6 million)
EBIT: EUR -9.8 million (2010: EUR 5.5 million)
Solar inverter sales volume: 139.3 megawatts peak (2010: 191.1 megawatts peak)
This press release is also available on http://www.sunways.eu/en.
The annual financial report is available at
http://www.sunways.eu/en/company/investor-relations/financial-reports/annual-reports/
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 2011, Sunways AG with about 330 employees realised sales of around EUR 115
million.
The shares of Sunways AG are listed at the Frankfurt Stock Exchange (SWW:GR,
SWWG.DE, ISIN DE0007332207).
For further information, please visit http://www.sunways.eu/en.
Further inquiry note:
Dr. Harald F. Schäfer
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.eu/de
sector: Alternative energy
ISIN: DE0007332207
indexes: CDAX, Prime All Share, Technology All Share
stockmarkets: free trade: Berlin, München, Hamburg, Düsseldorf, Stuttgart,
regulated dealing/prime standard: Frankfurt
language: English