Q-Cells SE Files for Insolvency Proceedings

Q-Cells SE will file for insolvency proceedings on April 3, 2012, at the competent Insolvency Court in Dessau. Against the background of the final ruling of the Frankfurt Higher Regional Court in the Pfleiderer case on March 27, 2012, the company had come to the conclusion that no going concern prognosis is given anymore.

Following an intensive review of alternative concepts for the implementation of the financial restructuring, the Executive Board has reached the conclusion that a going concern of the company cannot be restored on a sufficiently secure legal basis. Therefore the filing for insolvency proceedings is legally necessary.

The Executive Board and the preliminary insolvency administrator will work together to secure the continuity of the company within the insolvency proceedings.

On March 27, 2012, Q-Cells published its unaudited annual results for the 2011 fiscal year. These results show that the company achieved sales in 2011 of €1,023.1 million, thereby surpassing its target of more than €1 billion. In 2010, sales totalled €1,354.2 million.

EBIT (earnings before interest and tax) amounted to -€717.4 million in 2011 due to the unexpectedly difficult economic environment and extraordinary items, while in 2010, EBIT had come to €82.3 million. Q.CELLS was therefore forced among others to revise down the value of tangible and intangible assets by €398.5 million and take €129.1 million in impairment charges on inventories. Following net profit fell from €18.9 million in 2010 to -€845.8 million in 2011.

Production volumes for 2011 came to approx. 783 megawatt peak (MWp). Solar cells, of which about 60% were produced at the Malaysian production facilities, accounted for 717 MWp. The production of thin-film modules at the subsidiary Solibro in Germany amounted to 66 MWp. Besides that, crystalline modules with a total volume of 390 MWp were processed at external partners and at the in-house module production line at Bitterfeld-Wolfen.

Despite the decline of overall sales, the impact of the new Modules and Systems business units was considerable: module sales accounted for about 26%, while systems sales came to around 33%. Q-Cells would have shown a much more severe fall in sales, if it had still operated as a pure play solar cells manufacturer, given a fall in production volumes for solar cells by 20% and a fall in prices by 60%.