Equity under the German Commercial Code (HGB) reached €3.7 million at the end of August, from €20.4 million at the end of December 2016. Singulus said that the loss is mainly due to the delayed recognition of revenue under HGB.
Revenue can only be recorded under HGB principles if customers of a company have confirmed their final acceptance of ordered equipment, the company said in its HGB interim financial statements. It expects its outstanding shipments to be accepted by the beginning of the next fiscal year, from which point it can record the deliveries as sales revenue.
At the end of May 2016, Singulus received orders worth €110 million from a subsidiary of Beijing-based China National Building Materials (CNBM). The orders relate to the supply of production equipment for two CIGS module plants in China with an initial annual capacity of 150 MW.
“The economic success of our projects of course remains unaffected,” claimed Dr.-Ing. Stefan Rinck, chief executive of Singulus. “We expect a protracted investment cycle specifically for high-grade CIGS solar thin-film modules. Our customer has already commenced construction on further locations. All in all, we are therefore very optimistic with our expectations for the solar division.”
Singulus prepares its earnings statements in line with International Financial Reporting Standards (IFRS) principles. But it also issues consolidated financial statements in line with the principles of the HGB, which has slightly different rules for the recognition of business transactions.
The company's board will now convene an extraordinary general meeting to discuss the situation. It still has yet to announce the date of its annual general meeting.