Growing solar sales insufficient to stem cash burn at Singulus

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While a diversified technology portfolio can assist production equipment suppliers ride out downturns in certain sectors, Singulus’ improvements in solar shipments in 2015 has not been able to allow the company to avoid burning €19.2 million (US$20.45 million) in cash in nine months.

Singulus reported its financial results for the first nine months of 2015 this week, in which it reports that its available liquid funds have shrunk from €35.8 million ($38.2 million) at the start of Q1, to €16.6 million ($17.7 million) at the end of Q3.

On an operating basis, Singulus has lost €13.9 million ($14.8 million) in the first nine months of 2015. As bad as this is, it is an improvement on a loss of €38.7 million ($41.2 million) Y/Y.

The poor result comes as orders have almost doubled Y/Y. Singulus booked €84.4 million ($89.9 million) in orders for the first nine months of 2015, compared to only €48.4 million ($51.5 million) the previous year. Q3 has, however, been weak, with orders of only €11.3 million ($12.3 million), down from €23.2 million ($24.7 million) Y/Y. Order backlog at the end of Q3 is €40.7 million ($43.3 million), considerably higher than €15.9 million ($16.9 million) at the same time last year.

While orders have improved significantly Y/Y, Singulus has been forced to adjust is earnings expectations for 2015. A “lack of expected new orders” for Blu-ray manufacturing equipment is the major reason cited for the shortfall.

The company is presumably hoping that its relatively strong showing in the solar sector will help convince investors to agree to a debt-equity swap. The proposal will be presented first to bond and then shareholders at an extraordinary general meeting. The company has not specified a date for this.

Singulus has had success with its Silex II wet chemistry tool in 2015, which is deployed in the production of high efficiency solar cells. It is understood to have booked a sizeable order for this tool from a manufacturer outside of Asia. Singulus has also been supplying Hanergy with CIGS vacuum deposition tooling.