ErSol continues its growth course in 2006 with a significant earnings increase

(PresseBox) ( Erfurt, )

- Sales doubled in 2006 to € 127.8 million and EBIT to € 20.3 million
- 2007 will be marked by strong expansion activities
- Significant boost in earnings and sales in 2008
- Continued focus on technological progress – cooperation with US company Silicon Valley Solar Inc. (SVS)

Preliminary key figures for the ErSol Group as of 31 December 2006

million euros (IFRS) 2006 2005 Change
Sales 127.8 64.4 + 98%
EBIT 20.3 9.5 + 114%
EBIT margin 15.9% 14.7% -
EBT 19.7 9.5 + 107%

ErSol Solar Energy AG (ErSol), Erfurt has once again closed off the previous financial year with record results. Based on preliminary calculations, consolidated sales grew in 2006 by 98% to € 127.8 million (2005: € 64.4 million) following the Group’s capacity expansion, deliveries already accrued, thanks to the long-term raw materials agreements concluded in 2005, and the integration of the silicon-recycling subsidiary SRS in financial year 2006. Earnings have also shown disproportionate growth despite start-up costs for new business segments: earnings before interest and taxes (EBIT) were more than doubled to € 20.3 million (2005: € 9.5 million) and the EBIT margin grew to 15.9% (2005: 14.7%). ErSol has also recorded a sharp growth in earnings before taxes (EBT): EBT increased to € 19.7 million (2005: € 9.5 million).

“The doubling of sales in 2006 has exceeded our expectations. This is testament to the excellent work of our highly motivated staff, who have achieved this result from ongoing operations despite the massive expansion work that has been underway”, says CEO Dr. Claus Beneking of the annual results of the ErSol Group. “Given the tight raw materials situation, we are also very satisfied with our earnings growth”, continues Beneking.

Looking forward to 2007 and 2008 All the signs again point to significant growth levels at ErSol for the current year. “We are expanding our capacity at three sites in parallel. We have set ambitious targets for ourselves”, explains Chief Financial Officer Ekhard von Dewitz. The ErSol Group anticipates sales of between € 148 and € 155 million in financial year 2007. Thanks to the continued expansion of capacities in the Wafers and Solar Cells segments, which cannot be used until the end of the year, the ErSol Group's sales are expected to grow by about 20%. “What is satisfying is that in 2007 we may already see the first contribution to sales arising from the Group’s new thin-film activities”, says von Dewitz. Earnings before taxes (EBT) and EBIT are expected to at least match figures of the previous year. The Group currently estimates that a stronger growth in earnings will be curtailed by the continued scarcity of materials on the procurement market, which remains tough, and by the substantial start-up costs for investments in the Group's expansion.

“Many challenges face us during the current financial year. We are tripling our capacity in the crystalline area from 60 to 180 MWp and we are developing 40 MWp in thin-film technology. From 2008 this will generate huge earnings for us – and will allow ErSol to become a key player on the solar cells market”, von Dewitz firmly believes. With an output of approx. 140 MWp in the crystalline area and about 24 MWp in thin-film, ErSol anticipates sales growth of around 100% in 2008. The required silicon volumes and financing have been secured for this. On the sales side, almost 100% of these volumes have already been sold. ErSol’s Chief Financial Officer sums up the outlook as follows: “We know that the markets also expect profitable growth from us. We are very confident that we will not disappoint our investors. Compared to levels in 2006 and 2007, we aim to at least triple our operating profit. Managing this enormous growth presents a major challenge for us and our employees, but we are meeting the challenge with confidence, and with no shortage of energy”, concludes von Dewitz.

ErSol cells for new module technology

ErSol has found a new cooperation partner in Silicon Valley Solar Inc. (SVS), based in Santa Clara in California, and will supply this US company with its cells. SVS has developed a technology that offers an attractive solution for optimally deploying ErSol’s high-efficiency solar cells. The Sol-XTM technology that SVS is currently developing allows incoming light to be concentrated, and does not require the solar modules to constantly track the sun. This cuts down on the component parts, while also reducing costs per wattpeak in comparison with conventional technologies. The key advantage is in the way the light is coupled into the enclosed solar cells, which increases the efficiency. ErSol considers this technology to be an interesting addition to its existing product applications. This new partnership also allows ErSol to strengthen its activities in the rapidly-developing North-American photovoltaics market.

Upcoming event ErSol AG will publish its complete annual financial statements for 2006, as planned, on 29 March 2007. From then on you will find further information on our IR
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