Bitterfeld-Wolfen, 12 May 2011 – Q-Cells SE (QCE; ISIN DE0005558662) has recorded a significant drop in sales compared to the same period last year as a result of weak market demand in the first quarter of 2011. Sales of EUR 125.1 million were approximately 46 percent below the value for the first quarter of 2010 (EUR 232.3 million), which however included the sale of the utility-scale Strasskirchen project (EUR 72.5 million) and the electricity trading company QCCS (EUR 19.8 million) that was sold at the end of 2010. The seasonal weakness of the first quarter was aggravated by regulatory uncertainty in the important solar markets of France and Italy.
Falling selling prices in the first quarter along with high prices for solar wafers and silver in combination with weak demand have negatively impacted the earnings position of the Company accordingly. Earnings before interest, taxes, depreciation and amortisation (EBITDA) totalled EUR 15.3 million, slightly below the prior year value of EUR 18.8 million. Earnings before interest and taxes (EBIT) at EUR -10.6 million for the first quarter of 2011 also came in slightly below the prior year period (EUR -9.3 million). The net loss for the period was EUR -41.1 million (Q1 2010: EUR -46.4 million).
The production of solar cells and thin film modules totalled 313 MWp in the first quarter of 2011. Of the 284 MWp solar cells, 163 MWp were produced in the Q-Cells plant in Malaysia. The production of thin film solar modules (Q.SMART at the subsidiary Solibro) amounted to 29 MWp (+74% compared to Q1 2010). Net working capital increased from EUR 339.8 million to EUR 494.2 million in the first quarter of 2011.
“Despite the currently challenging market environment, we are convinced that we are on the right path with our strategic transformation” said Nedim Cen, CEO of Q-Cells SE. “We will continue the consistent pursuit of this path.”
Q-Cells has responded to weak demand by adjusting its production of solar cells and solar modules, both in the multicrystalline and the thin-film segments. The existing flexible production concept with selected international processing partners permits short-term responses to market fluctuations in the module production segment as well. Capacities for module production are to be expanded to 700 MWp by the end of the year. Up to 130 MWp thereof is planned for the fabrication of the high-performance module at the Thalheim site.
In addition to optimising production and processes, Q-Cells is also driving the related technology advancements. Two new world records in the development and production of solar modules underscore this claim: with 17.8% efficiency in the multicrystalline segment and 14.2% efficiency in the thin film segment (respectively on the active aperture area). This technology success constitutes proof that Q-Cells is highly innovative.
The current market situation shows that the photovoltaics industry remains highly dependent on developments in the European core markets of Germany, Italy and France. Even though the future markets in North America and Asia are growing steadily, they were unable to compensate for weak demand in Europe during the first quarter. However, Q-Cells sees great potential in these international markets over the long term and continues to expand its presence in 15 selected core countries, which jointly account for more than 80% of the global photovoltaics market. In order to convince international customers with its products and solutions, Q-Cells intends to present the next, even more powerful product generation – “Next Generation” – at the Intersolar industry trade fair in June 2011.
In the new strategic business area with smaller industrial and commercial photovoltaic systems (Commercial & Industrial), Q-Cells received the go-ahead for projects in France, Italy and the United Arab Emirates in the first quarter of 2011 and has a pipeline that amounts to over 100 MWp in total. Orders for utility-scale projects totalling 100 MWp are pending in North America, some of which are already in the planning and construction stages. The company has a total project pipeline in this business area of around 300 MWp for 2011, with 130 MWp in the international and 170 MWp in the German market.
Even in view of the current market situation, Q-Cells is standing by its strategic plan to become a leading international supplier of photovoltaics solutions. The company continues to optimise costs and processes, purposefully drives the development of new, international markets and is investing in innovative products and applications. Q-Cells counts on highly qualified and motivated employees around the world.
“Despite the events in Fukushima and the intensive discussions in Germany about an energy turnaround, structural changes on the international solar markets are not evident over the short term,” said Nedim Cen, CEO of Q-Cells SE. “We will continue working diligently to improve our technology and production processes, optimising the cost of our products and applications in order to offer precisely tailored, highyield solutions to our international customers.”
As the first quarter of 2011 developed less favourably than in the previous year and the demand situation for the second quarter as well as the second half of 2011 is fraught with great unpredictability, a forecast for 2011 carries considerable uncertainties. The company’s target to achieve the same level of revenues as in the previous year can be reached, provided that demand increases in the second half of 2011 and production capacities are utilised accordingly. Due to the high degree of uncertainty about the future development of purchase and sales prices, Q-Cells is presently unable to provide a forecast for operating income in the current year. With an increase in demand in the second half of 2011, a stabilisation of sales prices, falling prices for wafers and silver and the realisation of planned projects in the systems business, a positive operating income for the full year is to be expected.
EUR million (except production) Q1 2010 Q4 2010 Q1 2011
Production 174 MWp 297 MWp 313 MWp
Sales revenues 232.3 386.9 125.1
EBITDA 18.8 54.7 15.3
Operating income (EBIT) -9.3 27.7 -10.6
Net income for the period -46.4 50.0 -41.1