DGAP-News: Solar Millennium AG adopts strategic realignment - corporate strategy adjusted to secure growth and earnings prospects
(firmenpresse) - DGAP-News: Solar Millennium AG / Key word(s): Half Year
Results/Strategic Company Decision
Solar Millennium AG adopts strategic realignment - corporate strategy
adjusted to secure growth and earnings prospects
19.08.2011 / 08:14
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Solar Millennium AG adopts strategic realignment - corporate strategy
adjusted to secure growth and earnings prospects
- Corporate strategy adjusted to changed market requirements particularly
in the U.S. to secure sales and earnings
- Postponement of financial close for Blythe solar power plant project on
photovoltaics basis into the next 2011/2012 fiscal year
- Total operating performance of EUR 34.6 million in the first half of
the 2010/2011 fiscal year (previous year EUR 43.0 million) with EBIT of
EUR -32.6 million (previous year: EUR -25.1 million)
Erlangen, 19 August 2011 With respect to the development of the world's
largest solar energy location with a capacity of up to 1,000 MW in the
Californian city of Blythe, U.S., Solar Millennium AG (ISIN DE0007218406)
decided to take a new path in the last week. Instead of the previously
projected concentrated solar power (CSP) technology in the form of
parabolic trough power plants, the first two 250 MW plants are now to be
equipped with photovoltaics (PV). With this decision, the managements of
Solar Millennium and Solar Trust of America are reacting to the changed
market conditions in the U.S. featuring far more profitable prospects for
the use of PV in solar power plants that do not require storage.
Dr. Christoph Wolff, the CEO of Solar Millennium AG, explains this as
follows, 'At the moment, the U.S. market is clearly focused on peak load
supply. Due to the drastic drop in PV prices, we agreed with the
Californian utility to convert the power purchase agreements to PV'. Wolff
continues, 'The simultaneous sudden price increases for raw materials and
construction would have reduced our return on equity and risk provisioning
for our construction share in the Blythe CSP project to marginal values.
Against this backdrop, we made the entrepreneurial decision a few days ago
to focus on PV in the U.S. In anticipation of this market development, our
U.S. subsidiary built up the respective expertise early on. This enables us
to meet the specific needs of the U.S. market.'
The decision to revert to the significantly less costly PV variant also
means that Solar Millennium will finance the power plants on the free
capital market and forego the loan guarantee by the U.S. Department of
Energy for Blythe 1 and 2.
Wolff adds, 'The decision to use photovoltaics in Blythe does not mean the
Solar Millennium Group is turning away from its core technology of
solar-thermal power plants. According to our understanding, the market
differentiates between base load solar-thermal electricity generation or
concentrated solar power on the one hand and photovoltaics for peak load
demand on the other. Whereas the electricity from solar-thermal power
plants was more economic only less than two years ago, this relation has
changed completely due to the sharp drop in PV module prices, particularly
from Asia. Due to its suitability for base load supply, many regions still
attach great value to CSP in their energy mix, thus supporting the Solar
Millennium Group's growth opportunities.'
With this decision, the Company is continuing along the lines of the
strategic realignment first described by Christoph Wolff at the last
Shareholders' Meeting. This also includes the extension of solar tower
technology and possibly even Fresnel as well as the ability to implement
also photovoltaics and particularly hybrid PV/CSP projects as developer and
service company. By expanding its portfolio of smaller and medium-sized
PV/CSP projects and offering construction and operation services, Solar
Millennium seeks to achieve more continuity in its business model.
Results in the first half of the fiscal year
As expected, the result of Solar Millennium is negative in the first half
of the fiscal year, because the financial closes for Blythe and Ibersol
were not scheduled to take place before the second half of the fiscal year.
Given the shift of the Blythe financial close into the next fiscal year,
the result for the full fiscal year of 2010/2011 is now also expected to be
negative.
Solar Millennium AG closed the first half-year period from 1 November 2010
to 30 April 2011 with total operating performance in accordance with IFRS
of EUR 34.6 million, compared to EUR 43.0 million in the previous year, and
EBIT of EUR -32.6 million, down from EUR -25.1 million in the previous
year. The most noticeable sales contribution to total operating performance
was generated by the steady progress in the construction of Andasol 3 in
Spain, which went according to plan. Another positive effect on total
operating performance resulted from the higher changes in inventories item
of EUR 21.3 million (previous year: EUR 10.5 million). This item reflects
the further advancement of projects worldwide and the two core markets of
Spain and the U.S. in particular.
Business activities in Spain are focusing on the two Ibersol and Arenales
projects that each feature storage and a capacity of 50 MW. While the
Company is still working hard on the financial close of the Ibersol project
at the moment, the financing of Arenales was concluded only recently.
Following the entry of the Deutsche Bank subsidiary RREEF Infrastructure in
the Arenales project and the conclusion of bank financing at the beginning
of August, the first ground-breaking measures in the scope of an early-work
agreement have already commenced. Solar Millennium was able to involve OHL
Industrial as a strong partner and general contractor.
Against the backdrop of the changed situation in the U.S. in particular,
the Executive Board adheres to its decision not to issue a guidance for the
current fiscal year at the moment. As soon as the contracts for financing
and building the solar power plants have been actually concluded, the
Executive Board intends to issue target figures for a two-year period.
The developments in the last weeks and changes in the management have
increased the pressure to take action considerably. This is the reason why
the announced strategy program is being implemented earlier than previously
planned.
The Executive Board expects that the liquidity situation will remain stable
with the entry of additional investors in the Ibersol and Arenales solar
power plant projects as well as the issue of the eighth bond and the
Ibersol fund, and that it will be secured with the financial close for the
Blythe location. The Executive Board anticipates that the conclusion of an
agreement with a financing partner will strengthen the structure of the
capital basis.
In the course of its medium-term planning, the Executive Board expects a
considerable increase in total operating performance and earnings caused by
the implementation of the pending projects and the effect from the
strategic realignment.
The complete 2010/2011 interim report is available for download on the
website of Solar Millennium AG in the 'Investors - Download' section at
www.SolarMillennium.de
About Solar Millennium AG:
Solar Millennium AG, Erlangen, (ISIN DE0007218406) is a company that
operates globally in the renewable energy sector, with its main focus on
solar power plants. Together with its subsidiaries and associates, the
Company specializes in solar-thermal power plants, particularly parabolic
trough plants, and has taken a global leadership position in this field.
Solar Millennium is striving to further extend its expertise in this area
with the aim of achieving and securing sustainable technology leadership.
The Company covers all important business sectors along the value chain for
solar power plants: from project development and financing to technology
and the turnkey construction and operation of power plants. Solar
Millennium realized Europe's first parabolic trough power plants in Spain
as well as the first modern parabolic trough solar field in Egypt. In
Blythe (California), Solar Millennium is presently developing the largest
solar power plant in the world. Additional projects are planned around the
world with a total capacity of several thousand megawatts. The current
regional focus is on Spain, the U.S., the Middle East and North Africa.
About solar-thermal power plant technology:
Solar-thermal power plants generate electricity by converting solar
radiation into heat energy. In a parabolic trough power plant,
trough-shaped mirrors concentrate the incidental radiation onto a pipe in
the focal line of the collector. Its absorption heats a fluid heat medium
in the pipe, generating steam in the power block through a heat exchanger.
As in conventional power plants, the steam powers a turbine to generate
electricity. By integrating thermal storage, electricity can be supplied on
demand, even after sunset.
For further Information:
Solar Millennium AG
Corporate Communications presse(at)SolarMillennium.de
Investor Relations investor(at)SolarMillennium.de
Tel.: +49 (0)9131 9409-0
Web: www.SolarMillennium.de
End of Corporate News
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Datum: 19.08.2011 - 08:14 Uhr
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