SolarWorld expects further losses in 2013; signs preliminary deal on 80% of loan

SolarWorld has released its preliminary financial results for 2012 today with a 42% plunge in sales revenues and an EBIT loss of € 492.4 million (US$ 643.9 million), down from € -243.9 million in 2011. Meanwhile, consolidated net result decreased to € -476.9, compared to € -307.1 million in 2011.

The group currently has a net debt of €780.7 million. Last year, it boasted a total workforce of 2,355 employees; compared to 2011, it has lost 350 (150 in the U.S. and 200 in Germany).

Furthermore, due to a 40% price decline in the solar market and a decrease in shipments volumes, consolidated revenue went down by about 42% to €606 million (US$ 793 million) in 2012, compared to €1,044.9 (US$ 1,366) in 2011.

With respect to impairment losses, SolarWorld recorded a total of € 176.1 million, after a series of impairment tests on fixed assets were conducted. It also registered a negative net result not covered by equity capital, which amounted to € -38 million. This figure is unaudited and might be subject to amendments.

The group’s liquid funds amounted to € 224.1 million. In 2011, it had € 553.3 million. The release date of the final financial results has not been revealed.

2013

Looking ahead, SolarWorld expects 2013 to be "another difficult year for the solar industry." The photovoltaic manufacturer announced it would adapt its capacity according to demand needs. Although an increase in sales is expected in 2013, it will continue to post losses.

"Nevertheless, the company aspires to increase its sales in its module and photovoltaic components, in order to generate more revenues," said the company in a statement released.

In addition, it is also intends to enter new markets and expand its international presence, and to work on the consistent implementation of its restructuring plan to ensure its ability to act.

Debt restructuring

In other news, SolarWorld has started restructuring its debt through a debt and capital write-down. A preliminary agreement has been signed with creditors of about 80% of the company’s assignable loans. However, it still has to be approved by the committee.

The deal will help reduce 60% of the photovoltaic manufacturer’s noncurrent liabilities via a debt-to-equity-swap. This means that the owners would be losing almost all of their assets, according to a report from German business news agency dpa-AFX.

Another significant aspect mentioned in the agreement, but which still remains open for discussion in an upcoming extraordinary shareholders meeting, was a capital reduction of about 95% in combination with a capital increase against contribution in kind. The date of this meeting was not revealed.