Centrosolar: strong revenue and earnings performance

Centrosolar Group AG has, thanks to revenue of EUR 85 million and an operating result of EUR 8.2 million, improved substantially on the figures for the prior-year quarter (revenue EUR 61.7 million, ea…

Centrosolar Group AG has, thanks to revenue of EUR 85 million and an operating result of EUR 8.2 million, improved substantially on the figures for the prior-year quarter (revenue EUR 61.7 million, earnings EUR 7.3 million) and therefore made a very successful start to the 2010 financial year. The operating result, which surpassed the company“s own expectations, has already taken it more than half way towards the earnings figure forecast for the full year. Moreover, the net earnings of EUR 4.4 million also made this a record-breaking quarter. As in 2009, very few installations were possible in Germany for a period of almost two months at the start of 2010 due to snow. Centrosolar was, however, able to operate at full capacity throughout January and February thanks to high international revenue. As of March, demand in the German market also picked up rapidly, in anticipation of the forthcoming reduction in the feed-in tariff planned by the German government with effect from 1 July 2010. All in all, the company benefited from vigorous expansion in international business, which further increased total revenue 53%, while revenue in France more than doubled. Centrosolar Group AG also achieved above-average growth in the US and Italy, where it succeeded in extending its position as a systems integrator. Centrosolar Group AG continues to pursue a value added strategy for fitters of photovoltaic roof systems in the Solar Integrated Systems segment, with “Made in Germany“ quality, coordinated integrated systems and in-roof solutions for the roofs of private houses, as well as technical support in situ. This strategy is rounded off by patent-protected components such as solar glass and mounting systems in the Solar Key Components segment. Continuous improvement processes at the module manufacturing plant in Wismar along with the implementation of a more efficient production process at the glass finishing plant in Frth have further enabled Centrosolar Group AG to become one of Europe“s leaders for production costs. This can be seen by a consistently high EBIT margin of more than 9% for the past three quarters, despite the fact that the feed-in tariff in Germany was reduced by 9% at the beginning of 2010, with an adverse effect on development in average selling prices. The gross margin in the past quarter was 31.6%, compared with 10.9% in the corresponding period of 2009. The additional reduction in the feed-in tariff is prompting anticipatory effects that lead to expect a similarly strong second quarter, especially due to the fact that the production output of the Solar Integrated Systems segment is already “sold out“ until the end of June. Centrosolar can therefore confirm revenue expectations of EUR 340-370 million for the 2010 financial year. It also expects that the EUR 14-16 million target for the year could be met by mid-year and should therefore be exceeded for the full year. Nevertheless, earnings expectations can only be firmed up in the course of the second half since the impact of the changed legal position in Germany has yet to be assessed.