EANS-News: Sunways AG Third quarter 2012 marked by market and industry
environment
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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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Subtitle: - Earnings impacted by development of prices as well as sales and
production volumes
- International expansion of distribution channels
Financial Figures/Balance Sheet/quarterly report/9-month report
Konstanz (euro adhoc) - Business operations of Sunways AG (SWW:GR, SWWG.DE, ISIN
DE0007332207) in the third quarter of 2012 were impacted by the situation in the
markets, such as the continuously prevailing global oversupply of components for
solar systems, as well as by economic framework conditions, mainly the Euro
crisis. The demand for photovoltaic products and solutions decreased
significantly in the third quarter. In Germany, the amendment to the Renewable
Energies Act (EEG) adopted with retroactive effect led to a marked decline in
new system installations. Demand in Italy also declined when the Conto Energia 5
came into force. In addition, from July through September liquidity pressures
experienced by many companies in Germany and abroad resulted in a high supply
level in the markets and, correspondingly, strong pressure on prices. "At the
current level, manufacturers, in particular those from Europe, are hardly able
to charge cost-covering prices", says Michael Wilhelm, Chairman of the
Management Board of photovoltaics specialist Sunways.
Development of Group operations
In the months of July through September 2012, sales revenues of Sunways Group
amounted to EUR 11.5 million, a decline against the prior year quarter by more
than 50 percent (Q3/2011: EUR 23.3 million). The operating loss (EBIT) of EUR
11.2 million was at about the same level as in the third quarter of 2011
(Q3/2011: EUR -11.8 million). Successfully implemented cost reduction measures
with respect to workforce and raw materials as well as other expenses were more
than offset by necessary inventory write-downs across all product segments.
Taking into account deferred taxes relating to loss carry-forwards, earnings
after taxes in the third quarter of 2012 amounted to EUR -8.1 million (Q3/2011:
EUR -8.7 million).
Sales revenues of EUR 39.1 were generated in the first nine months of 2012
(9M/2011: EUR 84.2 million). During that same period, operating losses (EBIT)
amounted to EUR 24.5 million (9M/2011: EUR -21.6 million). Earnings after taxes
for the first three quarters of the current fiscal year were EUR -14.3 million;
earnings after taxes as of 30 September 2011 had amounted to EUR -11.2 million -
including the earn-out relating to the sale of MHH Solartechnik.
In the third quarter of 2012, sales revenues in the amount of EUR 5.5 million
were generated in international markets (Q3/2011: EUR 9.9 million). Thus the
international sales quota rose to 47.8 percent (Q3/2011: 42.5 percent). Thanks
to sales of solar cells to LDK Solar, Asian sales contributions increased to
11.3 percent. Total international sales generated by the Sunways Group in the
first nine months of 2012 amounted to EUR 17.1 million or 43.7 percent of total
sales revenues. During that period, the most important markets for Sunways in
terms of volume were Italy, Greece and France. In the solar module and solar
inverter segments, the Company gained access to some of the emerging European
solar markets during that period.
Expansion of sales markets for solar modules and solar inverters
At EUR 2.9 million, sales revenues in the solar cell segment declined by 76.0
percent against the comparable prior year quarter (Q3/2011: EUR 12.1 million).
The sales volume of solar cells (measured in terms of capacity sold) decreased
by 50.8 percent to 5.9 megawatts peak (Q3/2011: 12.1 megawatts peak). The
segment's operating result (EBIT) in the third quarter of 2012 amounted to EUR
-5.8 million (Q3/2011: EUR -4.0 million). As a result of the weak demand and
constrained solar module production activities at Sunways, short-time working
prevailed almost throughout the quarter. In the first nine months, the segment's
sales revenues amounted to EUR 12.8 million (9M/2011: EUR 46.1 million); the
solar cell sales volume was 22.0 megawatts peak (9M/2011: 45.9 megawatts peak).
The operating result declined to EUR -8.3 million during that same period
(9M/2011: EUR -6.9 million). The development of earnings in the segment was due
to drastic price declines in the market, inventory write-downs and reduced
capacity utilization.
In the solar module segment, sales revenues of EUR 3.4 million were generated in
the quarter under review (Q3/2011: EUR 14.0 million). LDK merchandise was used
to compensate for the at times limited availability of Sunways solar modules. As
demand weakened, the sales volume declined to 4.9 megawatts peak (Q3/2011: 11.4
megawatts peak). EBIT improved by EUR 3.5 million against the comparable prior
year quarter (Q3/2011: EUR -5.9 million).
Three quarters of solar module sales revenues in the third quarter of 2012 were
generated abroad, in particular in the emerging markets of South Eastern Europe.
In the prior year, the focus had still been on the established European markets
such as Italy or France.
In the first nine months of the current year, the segment's total sales revenues
amounted to EUR 16.2 million (9M/2011: EUR 59.5 million). The sales volume
dropped to 20.7 megawatts peak (9M/2011: 44.7 megawatts peak). Despite the
marked decline in sales revenues, the operating loss was reduced: EBIT improved
to EUR -8.1 million (9M/2011: EUR -10.5 million).
Sales revenues in the solar inverter segment declined to EUR 6.1 million in the
third quarter of 2012 (Q3/2011: EUR 7.3 million). In contrast, the sales volume
of Sunways solar inverters increased to 42.1 megawatts peak (Q3/2011: 38.9
megawatts peak). However, the segment's operating result (EBIT) dropped further
to EUR -3.0 million (Q3/2011: EUR -1.9 million) due to price declines in the
market which could not be offset on the cost side, the sell-off of individual
models as well as inventory write-downs.
On a positive note, international sales of Sunways solar inverters in the third
quarter rose by 14.3 percent against the prior year quarter. Sales markets in
Europe were expanded and access was gained to some of the emerging solar markets
in this product segment as well.
In the first nine months of 2012, sales revenues from solar inverters rose to
EUR 19.0 million (9M/2011: EUR 18.4 million). The sales volume increased
markedly by 42.2 percent to 127.6 megawatts peak (9M/2011: 89.7 megawatts peak).
Due to the development of market prices and inventory write-downs, an operating
loss (EBIT) of EUR 8.2 million was incurred in the first nine months (9M/2011:
EUR -4.2 million).
"We worked hard to create a broader regional base for our distribution
activities in Europe", emphasizes Michael Wilhelm, Sunways AG's Chairman of the
Management Board. "Together with LDK Solar, we are also developing and
implementing strategies for marketing our products outside Europe in the large
growth markets in North America and China. Sunways continues to stand for high
technological competence, above-average quality as well as an extensive
portfolio of services and makes consistent use of the cost advantages relating
to production activities in China."
Prospects for the fiscal year 2012
The photovoltaics industry has had to cope with enormous challenges for almost
two years. From today's point of view, the situation in Europe may be expected
to deteriorate even further in subsequent quarters: subsidy cuts in almost all
established markets in combination with a global oversupply of components result
in massive price and competitive pressures - not only for European companies. An
increasing number of companies has to cope with the corresponding effects on
their operating results and liquidity
"Against this background, a 12-month payment deferral granted by the LKD Solar
Group will support the funding of Sunways", says Michael Wilhelm. "Furthermore,
another agreement relating to financial support for our company was entered into
with our majority shareholder a few days ago", Wilhelm adds. In addition to
in-kind benefits, a shareholder loan in the amount of EUR 5.8 million was agreed
upon.
"We will not lose sight of our objective to again achieve profitable growth -
although, due to the massive deterioration of prices, this can currently not be
achieved in all product segments. Our objective for the entire fiscal year 2012
continues to be to stabilize the development of sales volumes and sales revenues
and to reduce our losses compared to the fiscal year 2011. The achievement of
this target is subject to risks, in particular in view of the year-end
impairment test", Michael Wilhelm adds with respect to future prospects.
Against the background of current developments in the industry and those
expected in subsequent years, Sunways will steadily monitor the competitiveness
of its individual business segments. In addition, we will implement measures to
improve the supply chain and pursue targeted cost management efforts.
Michael Wilhelm: "In the past months, several measures were developed - and in
some cases already initiated - together with LDK Solar to shape and secure our
company's future. The main goal is to achieve a more efficient and productive
participation in the competitive market in the future by bundling the activities
and resources of both companies. In this context, the focus will be on our
distribution activities".
Key figures Q3/2012
Group
Sales revenues: EUR 11.5 million (Q3/2011: EUR 23.3 million)
EBITDA: EUR -9.7 million (Q3/2011: EUR -10.2 million)
EBIT: EUR -11.2 million (Q3/2011: EUR -11.8 million)
Consolidated net loss: EUR -8.1 million (Q3/2011: EUR -8.7 million)
Earnings per share: EUR -0.47 (Q3/2011: EUR -0.75)
Sales revenues Germany: EUR 6.0 million (Q3/2011: EUR 13.4 million)
Sales revenues rest of Europe: EUR 4.1 million (Q3/2011: EUR 9.9 million)
Number of employees (30/09/2012): 267 (30/09/2011: 343)
Solar cell segment
Sales volume: 5.9 MWp (Q3/2011: 12.0 MWp)
Sales revenues: EUR 2.9 million (Q3/2011: EUR 12.1 million)
EBIT: EUR -5.8 million (Q3/2011: EUR -4.0 million)
Solar module segment
Sales volume: 4.9 MWp (Q3/2011: 11.4 MWp)
Sales revenues: EUR 3.4 million (Q3/2011: EUR 14.0 million)
EBIT: EUR -2.4 million (Q3/2011: EUR -5.9 million)
Solar inverter segment
Sales volume: 42.1 MWp (Q3/2011: 38.9 MWp)
Sales revenues: EUR 6.1 million (Q3/2011: EUR 7.3 million)
EBIT: EUR -3.0 million (Q3/2011: EUR -1.9 million)
Key figures 9M/2012
Group
Sales revenues: EUR 39.1 million (9M/2011: EUR 84.2 million)
EBITDA: EUR -19.2 million (9M/2011: EUR -16.7 million)
EBIT: EUR -24.5 million (9M/2011: EUR -21.6 million)
Consolidated net loss: EUR -14.3 million (9M/2011: EUR -11.2 million)
Earnings per share: EUR -0.82 (9M/2011: EUR -0.96)
Sales revenues Germany: EUR 22.0 million (9M/2011: EUR 42.0 million)
Sales revenues rest of Europe: EUR 15.0 million (9M/2011: EUR 42.3 million)
Solar cell segment
Sales volume: 22.0 MWp (9M/2011: 45.9 MWp)
Sales revenues: EUR 12.8 million (9M/2011: EUR 46.1 million)
EBIT: EUR -8.3 million (9M/2011: EUR -6.9 million)
Solar module segment
Sales volume: 20.7 MWp (9M/2011: 44.7 MWp)
Sales revenues: EUR 16.2 million (9M/2011: EUR 59.5 million)
EBIT: EUR -8.1 million (9M/2011: EUR -10.5 million)
Solar inverter segment
Sales volume: 127.6 MWp (9M/2011: 89.7 MWp)
Sales revenues: EUR 19.1 million (9M/2011: EUR 18.4 million)
EBIT: EUR -8.2 million (9M/2011: EUR -4.2 million)
Financial calender
As a consequence of the switch to the Frankfurt Stock Exchange's General
Standard trading segment, Sunways AG will publish semi-annual financial
statements as well as interim disclosures for the first and third quarters as
from the fiscal year 2013. The detailed financial calendar 2013 will be
announced at a later date.
This press release is also available on http://www.sunways.eu/en and
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 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). LDK Solar Group, one of the ten largest
photovoltaics companies in the world in terms of sales revenues, holds a
majority stake in Sunways since 2012.
For further information, please visit http://www.sunways.eu/en.
About LDK Solar
LDK Solar Co., Ltd. (NYSE: LDK) is a leading vertically integrated manufacturer
of photovoltaic products. LDK Solar manufactures e.g. polysilicon, mono and
multicrystalline wafers, solar cells, and solar modules. LDK Solar's
headquarters and principal manufacturing facilities are located in Hi-Tech
Industrial Park, Xinyu City, Jiangxi Province in the People's Republic of China.
For more information about LDK Solar and its products, please visit
http://www.ldksolar.com.
Further inquiry note:
Dr. Harald F. Schäfer
Leiter Unternehmenskommunikation und 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, Technology All Share, General All Share
stockmarkets: free trade: Berlin, München, Hamburg, Düsseldorf, Stuttgart,
regulated dealing/general standard: Frankfurt
language: English