Conergy Reports Q3 Results as the Company Looks Towards Asia for Growth

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One of the leading solar panel manufacturers, Germany-based Conergy AG, has released its third quarter results. The company’s quarterly shipments have fallen by 6% year-on-year to 84.3 MW, which translates into an even greater slump in revenues by 40% to $137M. This represents an 8.5% drop in shipments to 264.2 MW and a 38.4% slide in revenues to $446M for the first nine months of the current fiscal year. The fall in revenues, both for the quarter and nine months, was attributed to project delays in Asia coupled with the continuous decline in average selling prices (ASP). Moreover, the quarterly EBITDA has widened by 13.8% to $41M, which was a direct impact of the termination of contract by MEMC Electronic Materials, Inc. (NYSE:WFR) that came at a cost of $22.8M and contracts worth 175 MW in Europe.

Commenting on MEMC, Conergy’s CEO Philip Comberg said, “Through this [termination] we have freed ourselves of a great burden, and can benefit substantially from this in the long term." The pressure on ASPs was evident in the drop in gross margins for the first nine months from 19.7% in 2011 to 16.5% in 2012. The company’s net debt has increased by 6% from the end of the previous fiscal year to $158M.

However, on a positive note, the net loss for the quarter has fallen by 66% to $48M and the net loss for the first nine months has also dropped by 77.6% to $73.7M. Its shipments in Europe for the first quarter have remained fairly stable, from 209.3 MW in 2011 to 208.5 MW in 2012, despite the persistent debt crisis. The business has also reported a 50% increase in U.S. shipments, but overall, Asia Pacific and Americas (APAM) have fallen by 30% for the first nine months of the current fiscal year to 55.7 MW.

Conergy believes that it is on the right track toward profitability and expects better shipments in both the APAM and European segments. Just five days before announcing its quarterly results, the business revealed that it was developing 21 MW of power plants in Thailand for Thai Solar Energy Company Ltd. Conergy already has a strong presence in Thailand, with around 48 MW of projects under its belt, as the country moves forward to achieve a quarter of its total energy requirements from renewables by 2022. Moreover, Conergy is also working on a 900kW standalone PV project for Madhya Pradesh Forest Department in India. Mr. Comberg has asserted, "We have a strong position in Europe and are making good progress with the development of the Asian and American markets." However, its annual revenues for the current year are expected to fall year-on-year. The problems associated with increasing price pressure will persist due to a global economic slowdown as governments are increasingly inclined toward reducing subsidies and FiTs.