S.A.G. Solarstrom targets positive 2012 EBIT


At the end of the first quarter of the year, S.A.G. Solarstrom is confident that the global economy is picking up. Overall, it expects to achieve a positive operating result, despite recognizing that it may record sales declines, compared to 2011.

Q1 2012 sales revenue, although positive at €21.4 million, represented a significant decline on Q1 2011, which achieved sales of €78.9 million. EBIT fared worse, having fallen from €5.1 million in Q1 2011, to €-2.8 million. "In comparison with the previous year’s period, considerably fewer projects were … implemented in Q1 of 2012. Due to the preproduction costs for this project activity, EBIT was negative at -€3,225,000 (Q1 of 2011: €3,910,000)," wrote the company in its financial report.

Meanwhile, EBT declined, from €3.6 million in Q1 2011, to €-5.7 million in Q1 2012, and net profit fell from €8.2 million to €3.1 million.

Looking at the company’s various businesses, Project Planning and Plant Construction remained the highest revenue-generating area. A Q1 2012 EBIT of €-3.2 million was recorded, compared to €3.9 million in the same period last year. Sales also dropped from €68.9 million to €8.7 million.

Its partner sales division also recorded a negative EBIT of €415,000 in Q1 2012, compared to €212,000 in Q1 2011, despite the fact that sales increased by 43.4 percent, from €4.7 million in Q1 2011, to €6.7 million. EBIT for S.A.G.

Solarstrom’s Plant Operation and Services business remained "comparatively stable" at €798,000 (Q1 of 2011: €817,000). The increase in sales by 8.1 percent from €4.1 million in Q1 2011, to €4.4 million was said to have had a positive impact. Finally, in its Power Production business, the company recorded an EBIT of €48,000 in Q1 2012, compared to €190,000 in Q1 2011, and sales of €1.3 million, up from €1.1 million.

The company said the majority of its Q1 2012 sales were achieved in Germany – 84.6 percent – compared to Q1 2011, which saw 90.4 percent of its sales recorded internationally. Despite this, it said it will increasingly focus on non-European markets, "in order to compensate for the expected decline in the domestic market and the other established European markets." The U.S. and Turkey were mentioned as interesting markets. "However, in 2012, by far the majority of our sales will continue to come from Central Europe," commented CEO, Karl Kuhlmann.

Looking ahead to the rest of 2012, S.A.G. Solarstrom expects to sees a decline in sales "despite ongoing plans for a substantial expansion in sales volume, which was around 100 MWp in 2011."

It added, "Even in the event of a decline in sales, it is still the S.A.G. Solarstrom Group’s declared goal to achieve a positive operating result (EBIT) in the years 2012 and 2013, even if the long-term target margin of five to 10 percent might not be achieved in certain cases due to difficult market conditions. Despite the expected negative operating result of Q1 2012."