Sales in core business area increased by 29 % - customer failures at Centrosolar Glas and impairments undermine earnings
Overall, consolidated revenue of EUR 55.5 million was 24 % down on the figure for the prior-year quarter (EUR 72.9 million). As well as the loss of revenue in the solar glass area (EUR -7.8 million), a major factor behind the overall fall in revenue was the project sales of EUR 9.0 million reported in the third quarter of 2011. After elimination of this effect, core business - in other words the production and sale of photovoltaic modules, systems and components for roof systems - put in an almost constant revenue performance. As a result, the continuing deterioration in prices for modules was largely cancelled out by the higher sales volume. The proportion of revenue coming from outside Germany was increased further to 78 % (previous year 74 %).
For its European core business, the group was able to achieve a neutral operating result (EBITDA). However the consolidated result was well down on the previous year at EUR -4.2 million (EUR 4.2 million). This development can again be largely attributed to the reduced earnings of Centrosolar Glas and the project income booked in the prior-year period, which together account for some EUR 4.8 million of the difference from last year. In addition, the continuing drastic fall in prices in the photovoltaic market meant that the previous year's margins could not quite be emulated in the core business area, either.
As a result of its reduced activities in the project business area, the goodwill of Centrosolar Schweiz was tested for impairment. This process revealed the need for impairment of EUR 3.3 million with effect from September 30, 2012. In addition, deferred tax assets of EUR 3.9 million were reversed. These non-cash, non-recurrent effects produced a net result after tax of EUR -13.8 million (previous year EUR -0.6 million). For the first nine months, earnings per share thus come to EUR -1.20 (previous year EUR -0.35).
Because no particular adjustments to feed-in tariffs in the major sales markets are planned at the end of this year, there is no reason to expect the seasonal end-of-year rally that has been witnessed in previous years. The company consequently now expects to see annual revenue of EUR 215 to 225 million (instead of EUR 250 million as previously forecast).
Because of the anticipated weak overall demand for solar glass, but also bearing in mind that business for modules tails off in the winter, the fourth quarter is expected to bring further losses, albeit not quite as sharp as the previous year's. Nevertheless, for the year as a whole the losses will be up on the previous year's figure.
The comparatively weak demand worldwide has further increased the pressure of competition in the industry. The more acute imbalance between supply and demand should speed up the process of consolidation, offering the prospect that the situation could ease from as early as mid-way through next year.
CENTROSOLAR has always tailored its strategy to the segment of small to medium-size roof systems and secured a strong competitive position in that area. Furthermore, CENTROSOLAR regards itself as a leading developer of solutions for maximising internal consumption. Finally, the company has carved out a very good competitive position for itself in the rapidly growing North American market through comprehensive value-added services. Based on this strategy, the company is well placed to emerge stronger from the industry's phase of consolidation and will then be able to continue the profitable growth of previous years.
CENTROSOLAR Group AG
The listed company CENTROSOLAR Group AG, Munich, (stock exchange code WKN 514850) is one of the leading suppliers of photovoltaic (PV) systems for roofs and key components, with over 1,000 employees in Europe and North America and annual revenue of almost EUR 300 million (2011). Its product range comprises solar integrated systems, modules, inverters, mounting systems and solar glass. More than two thirds of revenue is generated internationally. There are CENTROSOLAR branches in Spain, Italy, France, Greece, Switzerland, the Netherlands, the UK, Canada and the USA.
CENTROSOLAR manufactures solar glass at plants in Germany and China as well as photovoltaic modules at a production plant in Wismar (Germany). The production lines for the finishing of glass have an annual production capacity of eight million square metres. The module plant certified to DIN ISO 9001:2008 in Wismar is one of the largest and most efficient such plants in Europe, with an annual capacity of 350 MWp.
For further information, visit: www.centrosolar-group.com.