SolarWorld narrows losses, but return to profit in 2014 doubtful

"Hooray, we are still alive," quipped SolarWorld CEO Frank Asbeck at the company’s annual news conference this week. Such a chirpy demeanor came laden with a palpable sense of relief as SolarWorld rolled out its much-anticipated financial performance figures for 2013.

Despite ostensibly experiencing a harrowing 12 months, the overriding message from the company was that things could have been much worse, save for a seismic restructuring program that not only saved the company from insolvency but now promises to help steer SolarWorld back towards profit – perhaps not in 2014, but possibly in early 2015.

The German solar company revealed that before interest and tax (EBIT), it made a loss of €189 million ($260 million in 2013), which was a huge improvement on 2012, when the solar panel maker ended the year €620 million in the red.

Revenues were also down by 25% to just €456 million – a performance attributed to massive overcapacity in the global PV market and injurious competition caused by low-cost equipment flooding the market from Asia.

Infamously leading the fight against China’s trade practices, SolarWorld was never far from the headlines in 2013, and attracted more ire this year when it was revealed that the company had secured a sizable investment from Qatar Solar Technologies, which acquired a 29% stake in SolarWorld in February – a move that prompted Jigar Shah, president of the Coalition for Affordable Solar Energy (CASE) to question the economic interests of the government-backed Qatari investors.

That influx of capital no doubt helped save SolarWorld, and investors in the company were asked to take a further painful haircut on their initial investment in attempts to curtail SolarWorld’s debt pile, easing it down from €1 billion to €427 million.

With its factories still pumping, SolarWorld is very much "still alive," and Asbeck has revealed that the company hopes to generate revenues of up to €680 million this year – up from €456 million in 2013. Such a performance, while representing a solid turnaround, would not quite be enough to propel SolarWorld back into the black, with the company predicting losses of between €20-€35 million this year.

A return to profit is scheduled for 2015, and the company aims to boost its sales to more than €1 billion in 2016.

"Global solar markets are set for renewed growth, and with clear positioning, we can share in this growth," said Asbeck.

Philipp Koecke, SolarWorld’s CFO, added: "We will do everything to return our company to profitability. The start of 2014 has been a promising one and we are on track."