S.A.G. Solarstrom has announced a significant increase in sales volume with a positive EBIT. The company closed the first quarter of 2012 with sales of €21.4 million (Q1 2011: €78.9 million) and an EBIT of -€2.8 million (Q1 2011: €5.1 million), claiming these results are in line with its schedule for 2012. The company states that in the previous year’s quarter, sales and EBIT had been influenced to a very great extent by the large-scale Serenissima project.
S.A.G. Solarstrom reports that in the first quarter of 2012, the business area Project Planning and Plant Construction was not able to profit from pull-forward effects in Germany due to the very short lead time of the announced amendments to the Renewable Energy Act (EEG). Pre-production costs for further project activities over the course of the year also diminished the result in this business area. Sales remained under pressure due to the high level of competition in Germany. In addition, financing costs for the large-scale Serenissima project were also borne by the S.A.G. Solarstrom Group up to the completion of the sales process on March 30, 2012 and thus influenced the group period result, which was negative at -€4.2 million.
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“In the first quarter, we laid key foundation stones for our further project activities in 2012, consistently applied the cost reduction program “Slim 2012” we initiated in Q4 of 2011 and continued to work on international expansion“, says Dr. Karl Kuhlmann, CEO of S.A.G. Solarstrom AG. “Even though the first quarter is diminished by the pre-production costs for further project activities in 2012 and one-off effects from the Serenissima project, we are proceeding completely according to plan for 2012. However, the entire industry is facing a very challenging year in 2012, due to the extremely last-minute changes to the feed-in tariffs in Germany and possibly also in Italy. However, the S.A.G. Solarstrom Group is well equipped for the difficult market environment – our four-pillar business model gives us the stability and the high positive operating cash flow the tailwind we need for 2012.”
Project planning and plant construction with pre-production costs
Sales were €8.7 million (Q1 of 2011: €68.9) and EBIT was negative at -€3.2 million (Q1 of 2011: €3.9 million) due to pre-production costs for further project activities. The S.A.G. Solarstrom Group’s direct sales had focused on the closure of the sales process for the Serenissima project, as well as on initiating and contractually finalizing further projects in Germany and abroad over the course of the year.
Strong competitive pressure in partner sales
Sales increased in the first quarter, compared with the same period in the previous year, by 43.4% to €6.8 million (Q1 of 2011: €4.7 million). The strong price competition for photovoltaic systems, particularly in the German market, continued unabated, so that the EBIT was negative at -€0.4 million (Q1 of 2011: €0.2 million).
Plant operation and services
Sales increased compared to the previous year’s period by 8.1% to €4.5 million (Q1 of 2011: €4.1 million). The company claims the increase in photovoltaic systems monitored by the S.A.G. subsidiary meteocontrol to 26,000 with a total output of 4.9GWp made a considerable contribution to this. EBIT remained stable in comparison with the previous year’s period at €0.8 million, despite the costs for further international expansion.
Power production
Sales increased by 19.1% to €1.4 million in comparison with the previous year’s quarter (Q1 of 2011: €1.1 million). In 2011, the company’s own power plant portfolio was extended by a 5.1MWp ground-mounted system in Kamenicna, Czech Republic, as well as with an almost 1MWp rooftop system in Dortmund. EBIT was €0.05 million as a result of seasonal effects.
High cash flow from operating activities
In December 31, 2011, the 48MWp project in North Italy resulted in a negative operational cash flow, high debt and a low equity ratio. Some effects have already been levelled out in the balance sheet at March 31, 2012. The S.A.G. Solarstrom Group thus disclosed a high positive operational cash flow of €157.8 million at March 31, 2012, (December 31, 2011: -€61.3 million), the debt fell again considerably at March 31, 2012, due to the repayment of the €80 million project bridging loan and the equity ratio increased to 18.2% (December 31, 2011: 14.5%). Nevertheless, the balance sheet still showed certain key date-related effects of the large-scale project at March 31, 2012. With the settlement of most of the liabilities from the large-scale project in April, these key figures have continued to improve considerably.
