Phoenix Solar’s CEO resigns; more restructuring on higher losses

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Further restructuring efforts are needed at Phoenix Solar to stem losses and focus on profitable business segments. Founder and CEO Dr. Andreas Hänel has also resigned his position.

Struggling project developer and PV distributor, Phoenix Solar is to close or divest a number of loss making operations in a bid to return to profitability after several years of heavy losses.

Dr. Bernd Köhler, CFO of Phoenix Solar said: “The discontinued operations made significant operating losses in 2012. This did not come unexpectedly. But the ongoing adverse market effects and the regulatory changes in disfavour of photovoltaics made it increasingly unlikely that the expected increase in shipments which was needed for a return to profitability would actually come to occur – in spite of numerous efforts by staff and management. Therefore, we had to react with the severe cuts we are now executing although this means to dismiss many qualified employees.”

The company did not say how many jobs would be lost in the latest round of restructuring.

The company intends to sell its components & systems and the power plant businesses in Germany and close it operations in Oman.
Business activities in Spain and Italy are planned to be “significantly reduced,” due the poor business environments for solar installations, making future profitability uncertain.

Instead, greater emphasis is being placed on its profitable and fast growing operations in Asia and the US. Operations in and Greece and France will continue as they are expected to profitable, according to the company.

Financial impact

The restructuring was said to result in extraordinary expenses of approximately €8 million, pushing guided losses for the full-year 2012 higher to around €32 million, compared to previous guidance of between €19 million and €25 million.

Revenue expectation for 2013 has also been revised downwards. The company expects revenues to be in the range of €160 million to €190 million, significantly less than its original forecast of €280 million to €310 million.

Phoenix Solar said that EBIT guidance for 2013 remained at breakeven to a loss of around €5 million.

Management changes

The major change involves the resignation of founder and CEO, Dr. Andreas Hänel. The company said that the resignation was ahead of time and effective February 28, 2013. The company said that Dr. Hänel would continue to serve in a consulting capacity.

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