Sunways hit by falling cell and module prices as 2Q sales decline 40%

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German PV market demand weakness impacted another German-centric supplier through the first half of the year. Sunways reported sales of €38.7 million in the second quarter, 40.1% declines from the prior year quarter when sales reached €64.6 million. EBIT was negative by €6.3 million, compared to EBIT of €5.0 million in the same period of 2010. The company noted that purchase prices for wafers only declined significantly at the end of the second quarter, while module selling prices had been under permanent pressure since the beginning of the year.

On a first half year basis, Sunways generated consolidated sales of €60.9 million, a decline of 44.1% against the prior year period, when sales reached €108.9 million.

The company generated a negative EBIT for the first six months of €9.8 million. After-tax earnings were negative € 2.5 million.

“Enterprises like Sunways are particularly affected by the pressure on prices for photovoltaic components since our value added is largely generated in Germany,” commented Michael Wilhelm, the Chairman of the Management Board of Sunways.  “To improve our results, we have initiated numerous measures on the sales and cost side which will be consistently pursued in the second half of the year,”

Like other German-based firms, international sales became a priority. Sunways reported international sales of €19.4 million in the second quarter, up from €13 million in the prior year period. The company said that 70% of sales outside Germany related to Italy. In the first half of 2011, international sales grew by 61% to €32.3 million, compared to €20.1 million in the comparable prior year period.

The company noted that module selling process had fallen by about 13% on average during the period from March through June 2011, while module sales volume reached a new high in the second quarter 2011, to 21.7MWp.

Management also noted that under the module production cooperation agreed with LDK Solar in late 2010, an increasing number of Sunways solar cells are being embedded in Sunways solar modules by LDK. This means that external sales volumes in the solar cell segment declined during the first two quarters of 2011.

Due to the continuation of challenging market conditions, Sunways has declined to provide full-year guidance for sales and gross margins.

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