Phoenix Solar narrows half-year loss, posts Q2 operating profit

Phoenix Solar AG on Thursday reported a half-year net loss of €7.5 million, down from a €16.6 million loss in the first six months of 2012. The company saw revenue drop 19% to €68.4 million year-on-year.

It attributed the decline to the discontinuation of the trading and project business in Germany in its existing form. Business in Germany accounted for 21% of total half-year revenue compared to 79% from international operations. While international subsidiaries only accounted for 43% of overall revenues in the first half of 2012, they made up 73.6% in the first six months of 2013.

Phoenix Solar said the results follow a strategic reorientation that has been implemented since February with a clear focus on high-growth regions in the United States and Asia. These were more visible in its second-quarter revenue, which reached €37.9 million (down from €46.5 million a year ago), of which 92.6% was generated in foreign markets – up from 70.4% in the second quarter of 2012 – and only 7.4% attributable to business in Germany, which made up 29.6% in the same period last year.

The company generated its first quarterly operating profit since 2010 with some €400,000 before interest and tax, up from a €13 million operating loss a year ago.

Phoenix Solar’s order book position amounted to €86.4 million at the end of the first six months — a decline of €56.7 million, or 40%, compared with the prior-year figure — with the international share accounting for €80.5 million, or 94.9%.

Half-year revenue generated by the company’s Components & Systems segment increased 16.1% to €44.7 million due mainly to the realization of a major order in Singapore. The Power Plants segment saw a revenue decline of 48.4% to €23.7 million in the period. The Components & Systems segment made up 65.4% of the company’s total half-yearly revenue, while Power Plants accounted for 34.6%.

Phoenix Solar CEO Bernd Köhler said: "We currently regard bolstering the sales successes that we have achieved in recent months as a central task. This is even more important given that the situation on European markets is currently unsatisfactory due to economic and political conditions."

Köhler nevertheless said the company is prepared for this development and could fully confirm its 2013 forecasts on the basis of business progress to date: "[W]e continue to anticipate revenue between €160 million and €190 million, and a further reduction in our operating loss (EBIT) to range between €7 million and €2 million, including restructuring expenses."