Centrotherm to transfer German thin film operations to Asia; 400 jobs to go

07. March 2012 | Industry & Suppliers, Markets & Trends, Top News | By:  Becky Stuart

Having suffered significant losses in 2011, despite a successful start to the year, centrotherm photovoltaics AG has unveiled a new program designed to cut costs and refocus its business. The aim is to place more emphasis on crystalline silicon. 400 jobs will be cut.

centrotherm HQ Image

Despite a positive start to 2011, centrotherm photovoltaics fell falt, leading it to announce significant job losses.

Under its news plans, named "ct foucs", the photovoltaic company has said it will close its thin film module activities down in Blaubeuren, and move some parts to Asia. This, it says, will allow it to "bundle resources, and create a unit that is closely geared to the market". "The Group's refocusing in its Thin Film Module segment has already started successfully with the conclusion of the CIGS project in Taiwan," explained the company in a statement released.

Going forward, it has said it will place more emphasis on crystalline solar cell and module manufacturing, specifically in relation to production systems and technologies, and the manufacture of high purity silicon. "A further significant component of the program will be the expansion of the Semiconductors & Microelectronics area," it added.

Furthermore, capacities are to be adjusted to match market requirements, and 400 jobs from 1,928 will be cut by mid-2012. This follows the company’s move of reducing overtime hours and vacation, and introducing shorter working hours.
Overall, centrotherm aims save €22 million a year through its ct focus program by the end of 2013.

The company could not be immediately contacted for further details on its changes.

The financials

Looking at the company’s preliminary financial figures, centrotherm suffered significant losses in 2011, despite recording revenues of €698.5 million, up 11.9 percent on 2010. EBITDA, at €10.2 million, fell flat in comparison to 2010, which reaped €101.3 million. An operating loss of €19.8 million was also recorded, compared to an operating profit of €75.4 million in 2010.

"Continued tensions within the sector, in particular, tangibly affected the 2011 earnings trend," continued the statement. "One-offs amounting to a loss off €75 million arose from adjustments to individual large-scale projects, and a weak third- and fourth-quarter operating profit and corresponding adjustments, which reflected market trends." As such, centrotherm failed to achieve its 2011 guidance – which it upped last October on the back of a successful six months – of €710 million of consolidated revenue, and a slightly positive EBIT margin.

In terms of the company’s different businesses, the solar cell and module segment performed surprisingly well, with revenues growing from €404.5 million in 2010, to €607.9 million in 2011. However, "the strained market situation, particularly in the fourth quarter of 2011, resulted in the postponement and cancellation of some projects, and necessitated a revaluation of inventories, which fed through to a fall in segment earnings to €71.9 million," it said.

The silicon and wafer segment was particularly hard hit, with revenues noticeably falling from a healthy €201.7 million in 2010, to €57.9 million, and an EBIT of €-70.3 million (2010: €21.2 million). Polysilicon price declines were attributed to the negative results here. "Given the extremly [sic] worsening of the market and financial situation, the Management Board was prompted to apply adjustments to individual large-scale projects in Asia in the third quarter, which exerted a considerably negative impact on segment operating earnings," explained centrotherm.

Meanwhile, the thin film module segment recorded revenues of €32.7 million in 2011, up from €18 million. EBIT also grew, from €-37.4 million in 2010 to €-21.4 million.

Looking ahead, CEO Robert M. Hartung said that the MENA region (Middle East and North Africa) will be a key market for centrotherm. "centrotherm photovoltaics' already good market position is to be further expanded in this growth region in the future," said the company. "We believe that photovoltaics is quite clearly on a medium- and long-term growth path due to rising energy demand worldwide, and the turnaround in energy policy that has started. We aim to benefit from this with a streamlined and efficient organization," added Hartung.

Centrotherm photovoltaics will publish its full financial results on March 27.


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