Solon’s financials hit by solar slowdown

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Group revenue was reported to have declined 11 percent, from €402.9 million in the first nine months of 2010, to hit €358.2 million. Meanwhile, at €134 million, sales figures paled in comparison to last year’s, which reaped in €160.56 million.

As with many German companies this year, which last year announced that they would focus more on their internationalization strategies, Solon is generating the majority of its sales outside of its domestic market. For the first nine months of the year, 83 percent of its sales came from countries other than Germany. It identified Italy and the U.S. as being particularly strong markets.

Solon went on to say that in the first three quarters of 2011, it sold photovoltaic systems with a total operating performance of 179 megawatts (MW), compared to 194 MW in the same period last year.

Its EBIT also suffered a massive loss, having fallen from €-5.5 million in the first nine months of 2010, to a very negative €-113.8 million in the period under review. "… the operating result was impacted by mostly non-cash one-time effects of €103 million," stated Solon. This was primarily caused by its termination of U.S. module production. "Adjusted for these one-time effects, the EBIT loss for the first nine months of 2011 amounted to €11 million," it added.

Solon’s net loss for the period, meanwhile, was a huge €208.3 million, in comparison to the net loss of €17.5 million in the first nine months of 2010. ?

At €5.7 million, however, the company’s cash flow in the first nine months of the year proved to be a silver lining, thus leading it to predict that it will achieve a positive cash flow from operating activities in 2011. The figures were boosted in the third quarter from operating activities of €21.4 million, "primarily in response to the lower working capital".

While the company did not provide any guidance for the fourth quarter of 2011, it did say that in addition to the reduction of net debt, it plans to press on with its planned financial restructuring in the fourth quarter of the year and conclude it by the end of next April.