Hamburg, November 30th 2011, Payom Solar AG had to cope with a drop in revenues in Q3. The still noticeable restraint on the demand side, a perpetual postponement of orders and project handling into the current quarter and a necessary adjustment of project sales according to the percentage of completion (POC) method led to the fact that the company achieved in the first nine months of 2011 consolidated sales of EUR 51.4 million and a negative EBIT of EUR 13.8 million.
The decisive effect in the third quarter was the reassessment of sales and earnings contributions from current projects which are rated under IFRS standards according to the percentage of completion method (POC) at Payom Solar AG and which were already reflected in the news for the first half of the year. Several cancellations in Q3 and indefinite postponements of projects necessitated an adjustment of the previous POC evaluation. Payom takes all efforts to realize the projects as soon as possible.
Apart from the reassessment of the POC approaches, especially one-off effects in Q3 were responsible for the negative earnings. Due to the progressive fall in prices for components, a repeated devaluation in inventory assets and expenses for the dissolution of last year concluded forward exchange operations incurred considerably. Furthermore, still existing contracts with suppliers were revalued and necessary provisions were formed. Overall, these effects in the third quarter led to a negative revenue of EUR 2.0 million and a negative operating result (EBIT) of EUR 11.1 million.
“We decided to take this step of fundamental adjustment in order not to burden future earnings with further potential special effects”, explains Claas Fierlings, new CFO of Payom Solar AG. “Thereby, we have overcome the company’s economic downturn”, says Fierlings. In the current fourth quarter, business has revived significantly. For the full year 2011, the management board assumes achieving a revenue level of around EUR 90 million. Although Payom is expected to be back in the black in Q4, fiscal year 2011 will nevertheless be closed with a loss.
The management board is well positioned for the coming financial year. “The current business year was a transitional year with many special factors that burdened earnings” says Fierlings. The company is well positioned for the future and plans to continue the pursued course consistently. Especially the business of self-operating solar power plants is going to contribute stable yields to Payom Solar AG’s business in the coming years. “Due to the adjustments made now and the nevertheless solid financial situation, it is our declared aim to emerge from the current sector crisis as one of the winners”, says Fierlings.
Source: Payom Solar AG