- Overall performance in Q1 of €55.4 million – a two-and-a-half-fold increase on the previous year's quarter of €19.5 million
- Strong project activity in first quarter will be reflected in sales and earnings in subsequent quarters
May 14, 2013. With its intense project activity in Q1 2013, S.A.G. Solarstrom AG is continuing its successful 2012 business year , in which the Group achieved sales of €189 million, an EBIT of €8.9 million and a consolidated annual result of €1.1 million. Up to March 31, 2013, 44MWp was installed in the UK alone. The major part of this installation volume was disclosed in the balance sheet as work in progress at the key date, and will become relevant for sales and earnings in subsequent quarters. In Q1 2013, the sales revenue was therefore slightly lower, at €19.5 million, than in the previous year's quarter at €21.4 million. 54.4% of sales were achieved in Germany, and 45.6% abroad. The EBIT was -€2.9 million (Q1 2012: -€2.8 million), due to the high prefunding costs of project activity and to the fact that the earnings from the high installation volume in the UK had not yet been realized at the key date.
The consolidated period result was thus also negative at -€4.2 million (Q1 2012: -€3.0 million) at the key date, due to the funding costs of the projects.Nevertheless, with an overall performance of €55.4 million (Q1 2012: €19.5 million), S.A.G. Solarstrom AG underscored its strength and stable development in project business in Q1 2013, even under adverse market conditions, following on from its successful business year in 2012.
"In 2013, we have been able to continue our positive development from the last two quarters of 2012, which will become clear from our sales and earnings over the course of the year", says Dr. Karl Kuhlmann, CEO of S.A.G. Solarstrom AG."However, the market remains challenging in 2013. In particular, the procedure for introducing anti-dumping duties, which in our opinion is completely misguided, could have very negative consequences on the European market for photovoltaic power. Under the current market conditions, we are still anticipating that we will continue to increase our installation and sales volume in 2013 and achieve a positive operating result".
Project Planning and Plant Construction
Of the approximately 44MWp that has been installed in the UK by March 31, 2013, only 4.5MWpwas reflected in sales in Q1 2013. The installationvolume reflected in sales was altogether 8.8MWp in Q1 2013 (Q1 2012: 4.6MWp). Despite the fact that installation volume doubled, sales in the business area Project Planning and Plant Construction only rose by 39% to €12.1million(Q1 2012: €8.7million) – a consequence of the considerable drop in market prices of photovoltaic components and systems over the course of 2012. The high prefunding costs of project activity, which were not offset by any sales or revenue in the majority of the projects, is reflected in the EBIT at -€3.0million (Q1 2012: -€3.3 million).The high increase in project activity compared with the previous year's quarter can be seen in the overall performance, which also includes the change in stock of work in progress. This increased to €48 million (Q12012: €6.9 million), almost six times higher than in the previous year, and shows the sales and earnings reserves for the following quarters.
In the business area Partner Sales, sales declined very significantly to €1.5 million (Q1 2012: €6.8 million), as did sales volume, to around 2.7MWp (Q1 2012: 8MWp), due to the continuing competitive pressure on the German market. The previous year's quarter included pull-forward effects in expectation of the feed-in tariff changes from April 1, 2012. Due to the price pressure on the market, the EBIT remained in the negative range at -€0.4 million (Q1 2012: -€0.4 million). By focusing on exclusive partners and developing these into service partnerships, it is hoped to improve profitability in this business area over the course of the year.
Plant Operation and Services
The business area Plant Operation and Services once again disclosed gratifying, strong-margin growth and increased sales in Q1 2013 by 11% to €5.0 million (Q1 2012: €4.5 million). EBIT also increased by 8% to €0.9 million (Q1 2012: €0.8 million). The business area benefited from the high demand for monitoring and forecast services. meteocontrol GmbH already currently monitors over 32,000 systems with a total output of 7.1GWp.
As a result of the extremely long winter with a poor supply of sun – according to the German Meteorological Service, the winter with the least sunlight since the start of national meteorological recording in 1951–sales in the business area Power Production declined to €0.8 million (Q1 2012: €1.4 million). If one adds together the electricity revenue of the business area Power Production and the electricity revenue from the photovoltaic systems in which S.A.G. Solarstrom AG holds investments, sales dropped by around €0.9million in comparison with the previous year.The EBITin the business area Power Production was negative, at -€0.4 million (Q1 2012: €0.05 million), due to the seasonally lower electricity revenue, which is offset by scheduled linear monthly depreciation. Over the whole year, this business area guarantees two-digit EBIT margins, even taking into account fluctuations caused by the weather during the course of the year.
Balance sheet at March 31, 2013
At the key date of March 31, 2013, heavy project activity in the UK influenced the balance sheet with a high working capital, which led to an expanded balance sheet total and, together with the funding of the Group's own power plant portfolio, to an equity ratio of 12%. Without the influencing factors of large-scale projects and the funding of the Group's own system portfolio, the equity ratio would have been around a solid 25%. The operative cash flow was -€11.1 million, as some of the projects are still in the sales process. In the previous year's period, in which the purchase price payment for a large-scale project had already been made on March 31, 2012, the operative cash flow was €157.8 million.
Positive outlook for 2013 confirmed
The S.A.G. SolarstromGroup has confirmed its forecast for 2013 to further increase installation and sales volume, which was around 117MWp in 2012, and to again achieve a positive operating result.