Phoenix Solar Q1 growth positive following dire 2011

Last week, the German solar company announced that it had successfully concluded a financing package worth €132 million, following the company’s failure to fulfill the agreements of a previous loan agreement. Despite this, it had to shed 60 percent of its German workforce.

Overall, FY 2011 saw Phoenix Solar suffer significant financial losses, however, the first three months of 2012 have brought more positive news.

Looking at the company’s consolidated revenues, FY 2011 saw a decrease of 38.1 percent from FY 2010, from €635.7 million to €393.5 million. In Q1 2012, however, revenues grew by 17 percent to €37.9 million, up from 32.4 million in Q1 2011.

Of this, its domestic business in FY 2011 fell 64.2 percent to €168.5 million, while its international revenues rose by 36.8 percent to €225 million. This trajectory was also seen in Q1 2012, which achieved international revenues €25.8 million, compared to €23.3 million in Q1 2011.

Broken down by segment, the company’s components and systems business saw a downturn from €368.5 million in FY 2010, to €241 million in FY 2011. On the upside, in Q1 2012, the segment saw increased revenues, from €17 million in Q1 2011, to €19.3 million.

Its power plants business suffered similarly, with FY 2011 revenues declining from €267.2 million in 2010, to €152.5 million, and increasing €15.4 million in Q1 2011, to €18.6 million in Q1 2012.

Phoenix Solar saw its FY 2011 EBIT plummet, from a healthy €36.4 million in 2010, to €-84.7 million. On a more positive note, in Q1 2012, EBIT grew from €-16.9 million in Q1 2011, to €-1.1 million.

FY 2011 EBIT margin was negative 21.5 percent, down from 5.7 percent in FY 2010. "This result is very strongly impacted by considerable write-downs on inventories due to the extraordinarily sharp decline in solar module prices in 2011 as well as by one-off effects from the impairment of project rights," explained the company in a statement released.

On the other hand, in Q1 2012 EBIT margin was negative 2.9 percent, compared to negative 52.2 percent in Q1 2011. "This result includes a one-off effect from the sale of 25 MW of the Kazanlak Project (Bulgaria) to Bosch Solar Energy AG. Moreover, the measures taken to lower personnel costs by 15.5 percent to EUR 6.0 million (Q1/2011: EUR 7.1 million) and other operating expenses by 26.9 percent to EUR 4.9 million (Q1/2011: EUR 6.7 million) as part of restructuring also had a positive effect on the results," it continued.

In terms of consolidated result after tax, FY 2011 hit €-86.4 million, compared to €24.1 million in FY 2010. In Q1 2012, this figure improved, from €-12.9 million in Q1 2011, to €-1.2 million. FY 2011 consolidated orders, meanwhile, fell from €158 million in FY 2010 to €119 million, and from €178 million in Q1 2011, to €113 million in Q1 2012.

Looking at its solar module business, FY 2011 saw sales declining 18 percent, from 313 megawatts peak (MWp) in FY 2010, to 257 MWp. On the upside, they grew 28 percent in Q1 2012, to 23 MWP, compared to 18 MWp in Q1 2011.

"With the signing of our new syndicated loan agreement on 11 May, Phoenix Solar AG is now financed through to the end of March 2014. Alongside the restructuring measures, we can now concentrate more fully again on our operations," stated CFO, Bernd Köhler.

As announced last week, for FY 2012, the company predicts consolidated revenues of between €210 million and €240 million, and an EBIT of €-25 million to €-19 million. It also hopes to see revenues of €280 million to €310 million, and an EBIT of €–5 to €0 million in FY 2013.