Phoenix Solar posts solid quarterly results with growth in revenues and EBIT
Building on its success in the first half of the year, German solar company Phoenix Solar has posted impressive third quarter results, with yearly increases across the board. While the company sees this as a springboard for future success, it has warned that previous forecasts for the fourth quarter have had to be revised down due to a delay in two large projects.
As a clear indication of the companys growth, Phoenix posted a 29.7% increase in revenues from the same period last year, totaling EUR 55 million, up from EUR 42.4 million in Q3 2015. Unsurprisingly, this translated into a steady increase in the capacity of systems delivered, up to 54 MWp in the quarter from 33 MWp last year. The company said that growth came in all the major sales regions of U.S., Middle East, and Asia-Pacific.
But this rise would mean little if it couldnt be translated into improving EBIT and gross margin figures, which, in Phoenixs case it did. In fact, the companys EBIT for the quarter was back in profit, recording EUR 0.2 million, up EUR 0.9 million from the EUR -0.7 posted in Q3 2015. Gross margin rose from 8.8% to 9.3%, and the companys net income was a healthy EUR 1.3 million.
These increases were also translated in the companys first 9 months of the year compared to the first 9 months of 2015, with a 31.8% rise in revenues and a rise in EBIT from EUR -3.5 million to EUR -0.4 million. Among growth in the various markets, Phoenix also put this down to disciplined pricing and various supply chain initiatives.
All three of our core regions the U.S., Middle East and Asia Pacific showed strong growth in sales in the third quarter of 2016, commented Phoenix Solar CEO Tim P. Ryan. Our projects gross margins have improved, thanks to a disciplined pricing approach and our continuous supply chain efforts, which are now bearing fruits.
One of the major events for the company was the sale of the Batisolaire 3 solar power plant in France, however, the proceeds from this were used to repay liabilities. With this repayment, the company was able to reduce its net debt down to EUR 21 million. The company now sees that it has an opportunity to start reinvesting in an attempt to incite further growth.
We continue to invest in building a strong and capable team of experienced solar professionals worldwide, explained Ryan. All in all, we are making solid progress on our stated goal of sustainable, profitable growth.
However, amongst the good news, the company also admitted that it had been forced to revise down its forecast for the fourth quarter of the year. This was due to delays to two of its projects in the U.S. and in Turkey, but the company says that it will now enjoy the revenues from these projects in 2017.
Even so, it is still forecasting impressive financial results for 2016. It believes that revenues will range between EUR 135 million to 150 million, up from EUR 119.4 million in 2015, and an EBIT between EUR 0.5 million to 2 million, up from EUR -1.6 million in 2015.
While disappointed by delays on two important projects in Q4 2016, these revenues will now be realized in 2017, continued Ryan. The solar PV markets globally continue to grow rapidly and we in turn will continue to profit from that trend with our reputation for quality solar PV projects, on time and on budget.