Sunways AG: First quarter 2012 affected by strong decline in selling prices
Konstanz, Germany - In the first three months of the current year, operations of Sunway AG experienced a weak development. Reductions of solar subsidies announced in Germany and other European markets were not reflected in Sunways' sales revenues in the form of corresponding pull-forward effects. This was due to the limited availability of solar modules resulting from production bottlenecks. In addition, pressures on selling prices, in particular for solar modules but also for inverters, continued and even increased during the first three months of 2012. In the first three months of 2012, the Sunways Group's sales revenues declined by more than half against the prior year quarter to EUR 10.4 million (Q1/2011: EUR 22.2 million). The operating result (EBIT) was negative at EUR 6.8 million (Q1/2011: EUR -3.5 million).
In the period under review, Sunways generated international sales revenues in the amount of EUR 3.3 million (Q1/2011: EUR 12.8 million). Business developments in Italy and Spain, where sales in each case declined by more than 90 % against the prior year quarter, were particularly disappointing. As of 1 January 2012, the Spanish government suspended solar subsidies. However, due to the intensified cooperation with the LDK Solar Group, sales in Asia increased to EUR 0.4 million (Q1/2011: -) in the first quarter of 2012. In all, Sunways AG's international sales decreased by 74.2 % or EUR 9.5 million against the first quarter of 2011 (Q1/2011: EUR 12.8 million).
In the first quarter of 2012, Sunways AG's capital increase from authorized capital resolved on 31 December 2011 was successfully completed. Only LKD Solar German Holding GmbH, an indirect subsidiary of LDK Solar Co., Ltd., was permitted to subscribe for shares. Upon completion of the capital increase, the interest of LDK Solar Germany Holding GmbH amounted to about 33 %.
The situation in the global photovoltaics markets will continue to be marked by significant pressure on prices and competitive pressures in the current fiscal year. "Our objective for the fiscal year 2012 is to stabilize our sales revenues", says Michael Wilhelm, Chairman of the Management Board of Sunways AG. "As far as the operating result (EBIT) is concerned, we expect to reduce our losses."
"As a member of the LDK Solar Group, Sunways will have access to the Chinese market and other international growth markets and customer segments. Purchasing benefits with respect to primary products from the LDK Solar Group and the access to production plants in China may significantly improve the Sunways Group's profitability", says Wilhelm. In addition, LDK Solar and Sunways are planning to complement each other's product portfolio and to jointly develop new products, such as e.g. high-performance solar modules and inverters for new markets and requirements.
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