Feb 13 (Renewables Now) - German photovoltaics (PV) maker SolarWorld (ETR:SWV) on Friday reported negative preliminary earnings for 2016 despite a 5% increase in revenue and a 19% jump in shipments.
Preliminary earnings before interest and tax (EBIT) were negative at EUR 99 million (USD 105m), which compares to an EBIT loss of EUR 4 million in 2015. The result includes one-off effects related to impairments on fixed assets amounting to a loss of EUR 25 million, not cash relevant.
CEO Frank Asbeck said that because of the drop in demand and prices in the second half of the year, the company "was forced to reduce its production volume and to stimulate sales with special measures". EBIT is expected to remain negative in 2017, but improve over the 2016 result “on the assumption that the solar market will remain fiercely competitive, but will not be subject to extreme price reductions”.
In an interview on the firm's website, Asbeck said that in the first half of 2016 the company had full order books and fully utilised production lines. However, in the second half of the year SolarWorld was "caught without warning by China’s decision to virtually bring its market to a standstill and to channel the country’s overproduction of solar modules completely into export markets." He stressed that this has been at dumped price levels.
Preliminary 2016 figures are available in the table:
|(in EUR million, unless specified)||2016||2015|
|Groupwide shipments (in MW)||1,375||1,159|
|Liquid funds at end of period||88||189|
SolarWorld expects higher 2017 shipments and somewhat flat consolidated revenue. On Friday it also presented a plan to improve its competitiveness by focusing exclusively on high-efficiency solar products. That plan includes a headcount reduction of 400 by 2019.
"We are striving for a visible positive EBIT in 2019 and to increase module shipments to about 2 gigawatts by then," said Asbeck.
(EUR 1 = USD 1.06)