Phoenix Solar slow to rise to profit
Phoenix Solar has released its financial report on the first three months of the financial year 2014 showing a steep decline in solar activity.
Following profound restructuring entailing the discontinuation of the trading and project business in Germany in the first quarter of 2013, the first quarter of 2014 saw a return to a rather more normal course of business, which was as expected, given the strong focus on the more volatile project business. Having completed the restructuring process, the company continues to work towards securing greater planning certainty as well as raising and stabilising sales in the Power Plants segment.
In the first three months of 2014, Phoenix Solar generated consolidated revenues of EUR 6.6 million (Q1/2013: EUR 30.6 million), reflecting a decline of 78.4 percent in a year-on-year comparison. Of these revenues, 11.7 percent (Q1/2013: 37.8 percent) was accounted for by domestic business and 88.3 percent (Q1/2013: 62.2 percent) by the international markets.
The Components & Systems segment achieved revenues of EUR 4.9 million in the first quarter of 2014 (Q1/2013: EUR 16.0 million), down 69.4 percent in a year-on-year comparison. The Power Plants segment delivered revenues of EUR 1.7 million (Q1/2013: EUR 14.6 million), reflecting a decrease of 88.4 percent. In terms of total quarterly revenue, 74.3 percent was therefore attributable to the Components & Systems segment (Q1/2013: 52.3 percent), and 25.7 percent to the Power Plants segment (Q1/2013: 47.7 percent).
In the first quarter of 2014, consolidated earnings before interest and taxes (EBIT) stood at EUR -2.2 million (Q1/2013: EUR -4.2 million), a considerable improvement in view of the decline in revenues. EBIT in the previous year was, however, burdened by the provisions of EUR 1.9 million formed for severance payments. The EBIT margin (ratio of EBIT to revenues) came in at -33.9 percent (Q1/2013: EUR -13.9 million). The increase in earnings, achieved despite the decline in revenues, reflects the substantial improvement in the post restructuring cost basis.
The consolidated result net of tax and minority interest stood at EUR -3.6 million in the first quarter of 2014 (Q1/2013: EUR -6.1 million). Calculated on an average number of 7,372,700 shares, basic earnings per share stood at EUR -0.49 (Q1/2013: EUR -0.82).
At the end of the first quarter, consolidated orders on hand posted EUR 62 million (31 March 2013: EUR 70 million), representing a decline of around EUR -8 million, equivalent to -11 percent compared with the previous year's figure. The share of international business in the order book also amounted to EUR 62 million (Q1/2013: EUR 63 million) and contributed 100 percent (Q1/2013: 90 percent) to total orders on hand.
Dr. Bernd Köhler, Chief Executive Officer of Phoenix Solar AG, stated, "We remarked back in 2013 that, after the far-reaching restructuring, a weaker quarter, such as we now have in March, is to be entirely expected in this initial phase of the 'new' Phoenix and is not automatically a cause for concern. We are engaged in intensive discussions in all core regions with customers and interested parties as, in the final analysis, only legally binding contracts and sound financing are what really count. Despite the anticipated weak revenue trend in the first quarter, we therefore stand by our fundamental forecast for the year as a whole: we anticipate revenues in a corridor between EUR 150 million and EUR 160 million and earnings before interest and taxes of EUR 2 to 5 million."
