Phoenix Solar posts Q1 net loss of €5.8 million as its shifts focus to Asia, US

In a statement on Wednesday, the company said results were in line with expectations, attributing the decrease in business to the discontinuation of activities in Germany.

Looking forward, Phoenix Solar said it would increase its focus on strongly growing regions such as the U.S. and Asia. The group’s international business accounted for 62.2% of its consolidated revenue, down from 68.1% a year ago. Revenue from the domestic market grew slightly from 31.9% to 37.8%, year on year, due to work performed on power plant projects commissioned before the company’s decision to shift its focus towards Asia and North America.

Phoenix Solar also saw a much stronger performance from its international subsidiaries, which delivered a 57.1% share of total revenue compared to 42.7% in the same period last year.

The group’s Components & Systems segment saw a 17.1% drop in revenue to €16 million (accounting for 52.3% of total revenue) while the Power Plant unit posted a 21.5% decrease to €14.6 million (making up 47.7% of total revenue).

Phoenix Solar’s loss before interest and tax (EBIT), which grew from €1.1 million to €4.2 million in the first quarter, comprised provisions of €1.9 million earmarked for severance payments in connection with the reduction of personnel necessitated by the decrease in business in Germany. As a result, the expected costs from the company’s repositioning have been fully absorbed in the first quarter.

The group’s EBIT margin stood at -13.9% compared to -2.8% in the first quarter of 2012, which saw a boost in business due to a project in Bulgaria.

"We note that almost all subsidiaries are developing as expected, or better,” said Phoenix Solar CEO Bernd Köhler. “This prompts us to confirm our forecast for the 2013 financial year: we continue to anticipate revenues of between €160 million and €190 million, and a further reduction in the operating loss (EBIT) to a range between €7 million and €2 million, after restructuring expenses."