Q-Cells: 250 employees to go; CFO resigns


2011 is expected to stay negative for Q-Cells, thus leading it to announce that 2012 overhead costs will be reduced by 25 percent. This will partly be achieved through the loss of 250 employees by the end of this year.

CFO Helmes has further announced her resignation "by her own request", as of the end of today. CEO, Nedim Cen will take on her role, in addition to his current duties. Meanwhile, Andreas von Zitzewitz, will take over responsibility for marketing and sales from Cen, as well as continuing on as COO. "With this streamlined management organisation the company is set up to operate effectively," commented Karlheinz Hornung, chairman of the supervisory board.

Worse than expected

In terms of its financial performance, Q-Cells experienced a weak Q3 due to worse than expected operating conditions. As such, revenues fell from €316 million in Q2 2011, and €401.6 million in Q3 2010, to €228.8 million in Q3 2011. This meant for the first nine months of the year, revenues of €699.9 million were reaped. Due to the expected realization of several utility-scale projects, the company forecasts its Q4 revenue results to be on a similar level to those in Q2. Consequently, it has confirmed its revenue guidance of €1 billion for the full year 2011.

Solar module shipments were said to be strong, with Q3 representing the highest level of shipments for Q-Cells this year at 156 megawatts peak (MWp) (Q2 2011: 147 MWp). The figure was almost half of that in Q3 2010, though, which saw 305 MWp shipped. The company added that the share of its solar cell sales, in total sales, fell from 69.2 percent last year to 46.5 percent this year.

Its internationalization strategy, however, is going more successfully, with Q-Cells having won its first major project in the U.S. Furthermore, it says that it has won new project clients in Japan, Australia, India and Malaysia.

EBIT, however, didn’t fare so well, coming in at €-47.3 million in Q3 2011. Although an improvement on Q2, which saw an EBIT of €-307.7 million, it represents a decrease on Q3 2010, which saw €36.7 million. "This result was due largely to the continued fall in prices while purchasing prices declined with a time lag. Also, underutilisation of production capacities as well as expenditures for measures initiated in August 2011 had impacted operating results," explained Q-Cells in a statement released. For the full year, it expects an EBIT in the negative three-digit million range.

EBITDA was also up on Q2 2011, from €-140.7 million to €-24.3 million, but significantly down on Q3 2010, which achieved €58.4 million.

In terms of the company’s cash and cash equivalents, it says it achieved the first positive free cash flow in 2011 of €41.9 million. This served to lift its cash and cash equivalents from €169.5 million in the second quarter to €230.3 million in Q3. Looking ahead, Q-Cells expects a further increase up to €300 million until the end of the year.

However, it explains, "With a view to the cash and cash equivalents required for the operating business, it cannot be excluded that the company will not be able to fully repay the convertible bond due in February 2012."

Q-Cells says that it has already contacted important bondholders who are invested in the company’s convertible bonds. It has also mandated investment bank Houlihan Lokey with assessing possible options.

It adds, "In connection with the company’s financial liabilities, Q-Cells is currently also updating its medium-term business plan as announced, being validated by a renowned business consultancy. The process of preparing this plan is in advanced stages and due to be concluded in the course of November."

Overall, Q-Cells achieved a net result of €-57.1 million in Q3 2011, up from €-354.8 million in Q2 2011, but down on Q3 2010’s €-19.9 million.