Q-Cells announces devastating 2011 preliminary financials


Q-Cells SE, which narrowly avoided having to file for insolvency last week, after its creditors agreed to defer bond payments, has had quite a year of it.

At the start of November, the photovoltaic company announced that it had to let go of 250 employees, in order to reduce overhead costs going into 2012. At the same time, CFO, Marion Helmes left the company, leaving CEO, Nedim Cen to take over her role.

The company then issued its financial restructuring plan at the end of January, which included delaying its bond repayments – this has since been successfully negotiated, as aforementioned – and restructuring its convertible bonds due in 2014 and 2015 via a debt-to-equity swap. The company reconfirmed the last aim, and said that it hopes to implement the plans in the second half of 2012.

Preliminary figures

While fourth quarter (Q4) and full year (FY) 2011 revenues sequentially increased, to €353 million and €1.02 billion, respectively, Q-Cells suffered significant losses to other areas of its balance sheet.

Net loss for Q4, after income and taxes, was €-393 million, while FY 2011 saw a devastating €-846 million being hemorrhaged. Q4 2011 EBIT, meanwhile, took a serious knock, having recorded around €-355 million. This consequently saw the company achieve a FY EBIT of €-720 million.

EBIT was said to be mainly impacted by impairments worth €226 million (net) for property, plant and equipment. Meanwhile, impairment for inventories hit €53 million, and another €36 million was incurred for provision for onerous contracts and purchasing contract negotiations.

"Due to the challenging market situation with persistently falling prices in the fourth quarter 2011 as well as the expected difficult market situation in 2012, the company was forced to conduct impairments on its property, plant and equipment as well as on inventories based on its updated business plan. One-off effects therefore had a strong influence on the fourth quarter’s EBIT,"Q-Cells explained in a statement released.

Had these impairments not been incurred, then Q4 EBIT would have been slightly more digestible, at €-40 million (FY: €-47 million).

2011 production volume was said to amount to 783 megawatts peak (MWp). Broken down, 717 MWp comprised solar cell production, with Malaysia’s share comprising nearly 60 percent, while 66 MWp involved production of thin film modules by its subsidiary, Solibro GmbH. Q-Cells additionally processed 390 MWp worth of crystalline modules at external partners’ facilities, and in its own module processing facilities in Germany’s Bitterfeld-Wolfen, Germany.

In 2012, the company expects to continue to see further losses. However, by 2013, it predicts a positive EBITDA.