AEG Power Solutions finished the second quarter of the year with a preliminary 9.2 million loss (before interest, tax, depreciation and amortization) and a 3.5% drop in revenue to 52.7 million.
The company, which did not publish preliminary net earnings, reported an 11% drop in EBITDA, reflecting low revenue from the groups Renewable Energy Solutions (RES) division.
Orders dropped 13.6% to 54.4 million overall yet far more severely in the RES segment, which saw orders drop 37% to 9.9 million. RES revenue plunged 46.6% to 9.4 million while EBITDA loss declined 14.7% to 4.5 million.
In addition to sinking RES revenue, AEG Power Solutions results also reflect provisions for certain renegotiated payment conditions with suppliers, relatively high one time inventory and bad debt reserves and provisions, the company said, adding that on the positive side, the quarter likewise reflected the first savings gained from restructuring and reductions in the overall operating expenses.
As part of that restructuring, the group sold its Skytron subsidiary in Berlin, Germany, and its affiliate in Bangalore, India.
Both disposals represent milestones in the operational reorganization process of the group as we refocus our scope and efforts on our core businesses and markets, said AEG Power Solutions Chief Restructuring Officer Jeffrey Casper.
Casper added that the company did not plan further major divestments but stressed that it was now under way to make the difficult transition to tackling the deep rooted inefficiencies in the core businesses which have been underperforming and undermanaged for a long time.
To that end, the company said it had taken serious measures to reduce its global and corporate cost basis but will need to take further measures in the third and fourth quarters of the year.
Looking forward, the group said further operational improvements and discontinuation of certain non-core business activities must be implemented in the next six months to reach a base of activities where the company can sustainably and profitably compete.
AEG Power Solutions Chairman Dirk Wolfertz added, While we have made a lot of progress in our restructuring efforts in a very short time, both operationally and financially, restoring confidence with our business partners remains of utmost importance to us in further solidifying our core end markets."
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