UK solar boom helps BayWa's energy segment in Q1

The solar boom in the UK in the first three months of 2016 helped BayWa AG's (ETR:BYW6) energy business make a good start to the year, the German group said last week.

Earnings before interest and tax (EBIT) at the segment, which includes the company's renewable energy subsidiary, BayWa re renewable energy GmbH, grew to EUR 16 million (USD 18m) from EUR 1.1 million a year back. Revenues declined to EUR 609.8 million from EUR 654.9 million due to the lower oil prices.

BayWa said its renewables business benefited internationally from continued robust demand for solar and wind farms. The low oil prices, meanwhile, drove demand for heating oil.

The company completed the sale of the 17.7-MW Homestead solar park in the UK in the quarter and connected six solar parks totalling 128 MW to the UK grid ahead of the April 1 cut in solar subsidies.

The group's EBIT loss widened to EUR 12.4 million from EUR 3.3 million, due to a difficult environment for its agricultural business. Along with energy, the building materials segment also fared well in the quarter.

"We expect that we will make up significant ground in the months ahead thanks in particular to our agricultural trading and sales activities, which have been picking up since April," said chief executive Klaus Josef Lutz. "The energy business, and renewable energies in particular, will also likely develop very well," the CEO also said.

(EUR 1.0 = USD 1.128)

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