Improvement in earnings expected in 2009 through reduction of restructuring-related extraordinary items.
·Revenues up 40% in 2008
·EBIT loss reduced by 26%
·Global financial crisis in fourth quarter has significant impact on 2008 annual result
·Audited group financial statements will be published on 27 March 2009
Hamburg, 5 March 2009 – In a year of fundamental restructuring measures, the solar energy company Conergy has, according to preliminary figures, increased its revenues by 40% to EUR 1,006m (previous year: EUR 719m). Despite this, due to large burdens in the fourth quarter, it was not possible to improve earnings (EBIT) as had been the aim. This now stands at EUR -158m (previous year: EUR -213m), significantly below expectations. This figure includes special effects and other non-recurring costs of EUR 118m due to exchange losses, the ramp-up in Frankfurt (Oder), and the ongoing restructuring programme among others. Of these costs, EUR 81m were incurred in the fourth quarter, of which large part is due to the financial crisis. Included are writedowns on inventories of EUR 16m, caused by an unexpectedly quick and sharp fall in module prices.
In its continued operations, the company recorded an annual loss of EUR -199m (previous year: EUR -213m). Including discontinued operations, the annual loss came to EUR -252m (previous year: EUR -248m). The preliminary result could still change, partly depending on the outcome of current negotiations with an important supplier. Conergy will publish its final and audited financial statements on 27 March 2009.
For Conergy, 2008 was characterised above all by its ongoing restructuring programme. The company cut approximately 1,000 jobs worldwide, withdrew from eleven countries, and focused on its core markets in the photovoltaics sector. At the same time, Conergy successfully sold off peripheral business activities such as solar thermal energy and the production of wind turbines. As such, since the end of 2008, Conergy has been clearly positioned as a photovoltaics company with a focus on downstream business. Conergy has paid off a significant portion of its debts to banks following a capital increase of EUR 400m, which the company was able to successfully place in the fourth quarter of 2008, despite the tough capital market environment. After deducting these debt repayments and the cost of the capital increase, the company gained new funds of EUR 110m. Conergy was thus able to significantly improve its capital structure at the end of 2008.
“The financial and economic crisis led to unforeseeable extraordinary burdens in the fourth quarter, which affected us as well. The explosive structural change in the PV market – the transition from a seller's to a buyer's market – took place in just six to eight weeks. We – like almost everyone in the industry – were not able to react to this quickly enough due to our existing supply contracts, partly as a result of which we fell short of our expectations in the annual result for 2008. Nevertheless, we believe we are on the right track in 2009: following its year of restructuring measures, Conergy is a leaner, more efficient and more dynamic company. Furthermore, our business model is precisely oriented to the structural change which has now come about in the PV market. In 2009, we are expecting a considerable reduction in the restructuring-related extraordinary items which have been such a burden up to this point,” said CEO Dieter Ammer.
Improvement in earnings expected in 2009 through decline of restructuring-related extraordinary items.
For instance, losses of approximately EUR 53m from discontinued operations will not burden results. The company will also significantly reduce its interest burden, which amounted to EUR 71m in 2008. By the same token, Conergy is substantially cutting its legal and consultancy expenses.
Furthermore, many experts believe that the downstream sector, on which Conergy has focused, will play an increasingly important role from 2009 onwards. Within the downstream sector, Conergy will be concentrating even more precisely on profitable markets in the future. Consequently, the company is withdrawing from its low-margin business in Korea, which has repeatedly led to large foreign exchange losses. This withdrawal, which has already been taken into account in the 2008 results, goes hand-in-hand with a shift of focus to the more promising US market.
About Conergy
Since its founding in 1998, Hamburg-based Conergy AG has sold more than a gigawatt in renewable energy, making it one of the biggest European suppliers of solar energy and other renewable energies, and a world leader in solar system integration. Of the one gigawatt in renewable energies, Conergy has installed more than 400 megawatts in its major projects, Of the total one gigawatt, 200 megawatts falls to its wind energy park projects and 800 to its globally marketed solar modules. According to the German Solar Industry Association (BSW) this is just under a fifth of the entire installed photovoltaic output in Germany. Calculative one in ten modules worldwide was produced, sold or installed by Conergy.
Listed on the Frankfurt Stock Exchange since 2005, the group pursues a global growth strategy, The company now produces, installs and designs solar power systems and wind turbines in around 15 countries. The Conergy Group is represented with its own branches on four continents. |