The full extent of the impact the ongoing Greek debt crisis is having on European PV companies and across EU business in general was hinted at in the latest financial update released by Swiss solar developer Etrion.
Tucked away below headline news of the company’s first power sales in Japan and a $1.3 million rise in first-half revenues, year-on-year, was a net loss of $10.1 million recorded in the second three months of the year, posted despite a gross profit of $8.5 million.
A $2.5 million chunk of that red figure was explained away as extraordinary capitalized development costs associated with Etrion’s 70 MW, 70 per cent owned Salvador plant in Chile, but the ongoing weakness of the euro against the dollar was also fingered as a significant factor in the remaining $7.6 million deficit by CEO Marco Northland, in Wednesday’s financial update.
Weak euro hits EU developers
It is unclear quite how much of the deficit was down to the weak currency prompted chiefly by ongoing Greek debt negotiations as Northland also pointed to falling power prices in Italy, where Etrion has a 17-plant, 60 MW portfolio, but the historically low exchange rate against the dollar has clearly hit the developer’s bottom line.
Although investors may be reassured the Chile costs are a one-off, the fact Etrion specifically highlighted further capacity would arrive in Japan where the company has developed only the 9.3 MW Mito project, and 83 per cent owned at that rather than in the fast expanding Chilean market, over the next year, seems an odd choice.
With Q2 gross profits falling on a year on year comparison, net losses soaring from $1.4 million to that $10.1 million for a first-half figure that rose from $9.6 million in 2014 to $12.5 million, quarterly revenues falling marginally and EBITDA falling significantly for the quarterly period and the first half, the only high points in Etrions figures was the first-half rise in revenue.
With Etrion building from a small base in Japan, Northland will join the throng of European businesspeople hoping for some positive news to emerge out of the EU in the months ahead.