Sunways reports strong inverter sales and international growth

Sunways’ sales increased by 48 percent in the third quarter of 2010, to reach €58.3 million(Q3/2009: € 39.4 million). This, said the company, was a result of "dynamic demand" for its products.

As a result, in the first nine months of the fiscal year, its consolidated sales rose by 36.3 percent to €167.2 million (9M 2009: €122.7 million). Based on the results of the first two quarters, earnings before interest and taxes (EBIT) reached €13.7 million, which exceeded the 2009 comparative figure by €19.8 million (9M/2009: €-6.1 million).

International success

The company’s international business recorded "very successful" third quarter development. It says that with a sales contribution of €16.9 million, the international business accounted for 29 percent of total sales and thus increased six fold compared to the prior year figure (Q3/2009: 2,8 million). This also corresponded to an increase of another 30 percent against the second quarter of the current year. It cited Italy and Spain as key markets.

Sunways went on to say that compared to the first nine months of the previous year, international sales tripled to hit €36.9 million (9M/2090: €11.5 million). With higher consolidated sales posted in 2010, it said the percentage proportion of business in the European markets outside Germany grew from 8.4 percent to 18,5 percent. Important sales markets for Sunways products, in addition to Italy and Spain, were Greece, France, Liechtenstein, Austria and the Czech Republic.

"The steady expansion of our European business activities outside Germany was apparent throughout the first nine months of 2010 as volumes grew steadily. We intend to consistently keep up this development to become more independent of the terms and conditions of subsidy programs in the individual countries," commented Michael Wilhelm, chairman of the Management Board of Sunways AG.

PV products

Furthermore, the company has said its solar cells, modules and inverters businesses are growing positively. It said that in the third quarter, sales in the cell segment rose by 51 percent to €27.9 million (Q3/2009: € 18,5 million).

Sales volumes additionally doubled to 24.5 megawatts peak (MWp) (Q3/2009: 11.8 MWp). However, explaining a drop in its EBIT, the company said that due to lower cell selling prices in the third quarter, in addition to raw material price increases, the segment EBIT amounted to just €2.1 million, compared to €2.5 million in the third quarter of 2009.

In the first nine months of the current year, total solar cell sales amounted to €80.8 million and thus exceeded the corresponding figure for the period from January through September 2009 by just under 10 percent (9M/2009: €73.7 million). Additionally, the sales volume grew by 63 percent to 73.0 MWp (9M/2009: 44.7 MWp). Overall, the product segment’s EBIT in the first nine months of 2010 grew "markedly" to reach a new record level of €9.1 million (9M/2009: € 2.5 million).

In relation to the company’s solar modules, sales in the third quarter amounted to €19.6 million and thus exceeded sales in the prior year quarter by 19 percent (Q3/2009: € 16.4 million). The module sales volume rose "markedly" to 11.3 MWp (Q3/2009: 7.8 MWp). However, it said that despite the sales and sales volume growth in the product segment, EBIT only improved slightly to €-1.5 million (Q3/2009: €-2,4 million). This, it said, was mainly due to higher production costs resulting from an increase in transfer prices for solar cells and in particular to the "still very high prices" charged by the German module manufacturers for stringing solar cells.

In the first three quarters of the year, solar module sales amounted to €68 million and increased by 74 percent against the prior year figure (9M/2009: €39 million). Although the EBIT generated in the same period of €0.0 million made no positive contribution to consolidated earnings, the company says this figure constitutes a "significant improvement" against the prior year (9M/2009: €-5.1 million).

The module sales volume in the first nine months of the current year rose by 125 percent to 37.4 MWp (9M/2009: 16.6 MWp). Sunways added that due to "further improved delivery capacities" it is confident that the targeted duplication of sales volumes of around 50 MWp for the entire fiscal year will be achieved.

At €16.9 million, sales of the solar inverter segment in the third quarter increased to more than 3.5 times the amount reported in the prior year (Q3/2009: €4.5 million). The sales volume grew from 18.4 MWp in the third quarter 2009 to 68.0 MWp in the past quarter. With an EBIT of €3.4 million (Q3/2009: €-0.7 million), the company said the past quarter was the most successful three-month period so far in the product segment’s history.

Accumulated inverter sales in the first nine months of the year then, amounted to €35.8 million (9M/2009: €10.0 million) – a sales growth of 258 percent. Sales volumes increased from 39.9 MWp in the first nine months of 2009 to 145.0 MWp in the corresponding 2010 period. EBIT for the first nine months of the current year amounted to €4.6 million (9M/2009: €-3.5 million).

Looking ahead

In a statement, the company said: "Following two unscheduled reductions of feed-in tariffs in Germany, Sunways AG again expects moderate pressures on the selling prices for PV system components in the fourth quarter. Moreover, Sunways anticipates a reduction of sales volumes against the preceding quarters of the current year in the high-margin inverter business. In view of the supply shortages in spring 2010, end customers placed orders that in some cases are currently being cancelled.

"On the procurement side, Sunways AG anticipates a currency and demand related increase in prices of raw materials (in particular wafers), but also expects that the inverter component supply situation will ease slowly and steadily. With respect to the module business, Sunways AG is confident that the projected duplication of the 2009 sales volume will be achieved. Sunways recently certified LKD Solar as an additional partner for the production of Sunways solar modules and, consequently, expects margins to improve palpably in the medium term due to lower stringing costs."

Due to its positive financial results, the company concludes by saying it has made an upward adjustment to its sales prognosis for the fiscal year. As such, it said it expects to see sustained profitability with an EBIT margin of about six percent and an increase in consolidated sales to €215 – 225 million. ?