SolarWorld AG Increases Foreign Share in 2011

The consolidated financial statements of SolarWorld AG were published for fiscal year 2011 and substantiated the preliminary figures previously announced. Business in modules and components rose 14%, whereas external shipments for wafers dropped. The foreign sales quota rose to 68% in 2011, compared with 59% in 2010, in line with the company’s globalization strategy.

SolarWorld surpassed the €1 billion mark in revenues for the third year in a row. However, the company generated €1.047 billion in revenues in fiscal year 2011, compared to €1.305 in the previous year – a decline of 19.8% due to the fall in prices. Groupwide earnings before interest, taxes, depreciation and amortization (EBITDA) dropped to €219.3 million, compared with €281.3 in 2010.

Market capitalization in 2011 fell substantially below SolarWorld’s equity reported on the balance sheet. As a consequence, property, plant and equipment were tested for impairment. This test identified a net impairment of €314.5 million, primarily due to the production sites in Germany and the U.S. The company’s earnings before interest and taxes (EBIT) was greatly affected by the impairment charges and amounted to -€233.2 million (in 2010: €192.8 million). Company earnings for 2011 amounted to -€299.3 million (in 2010: €87.3 million).

“The year 2011 was difficult for the solar industry and, for SolarWorld, an unsatisfactory one. Our 2011 earnings were affected primarily by global excess capacities and the tremendous decline in prices that ensued,” CEO Dr.-Ing. E. h. Frank Asbeck commented. “In addition, we were confronted by the insecure conditions of the regulatory framework and economies in our core markets, in general.”

Strengthening competitiveness In the fiscal year 2011, SolarWorld decommissioned older production lines in the U.S. and Germany and began to focus on its state-of-the-art systems at the fully integrated production sites in Freiberg and Hillsboro. These restructuring measures, in addition to further measures to improve efficiency, helped SolarWorld to considerably cut costs in 2011. However, the substantial savings could not entirely compensate for the global decline in prices.

“China’s dumping prices for modules and its illegal subsidies are to blame for the massive decline in prices,” explained Dr. Frank Asbeck.

U.S. subsidiary SolarWorld Industries America Inc., with the support of the Coalition for American Solar Manufacturing (CASM), filed its trade cases in in the U.S. in October 2011. The U.S. Department of Commerce is investigating China’s subsidy programs and the pricing policies of Chinese manufacturers. A preliminary decision was made on March 20, 2012, to put into effect anti-subsidy duties on Chinese solar power products. In addition, a decision on the U.S. anti-dumping measures is expected in May.

“We are confident that we can restore the conditions of fair competition in this manner,” added Dr. Asbeck.