SOLON publishes figures for the first quarter of 2011 - performance suppressed by weak market environment

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quarterly report


SOLON publishes figures for the first quarter of 2011 - performance suppressed by weak market environment

-       Group revenues for the first quarter at EUR65.2 million
-       Operating loss of EUR17.0 million
-       Consolidated net loss of EUR21.5 million

Berlin, May 12, 2011 - SOLON SE, Berlin, Germany, today presented its business
figures as of March 31, 2011. 

In the first three months of 2011, the solar industry experienced far-reaching changes of the general conditions in its major European markets of Germany and Italy. In early February, the German Bundestag announced additional reductions in solar subsidies to take effect as of July 1 of this year, thereby clarifying the future subsidy environment at an early stage. However, the expected surge in demand for solar installations in the spring after the typically weak sales of the winter months failed to materialize. Apparently, many German customers delayed making investment decisions in expectation of a further drop in prices in the run-up to the next tariff reduction. Another surprise originated from Italy where the law on feed-in tariffs which had come into effect at the beginning of the year was abrogated as of May 31 of this year. Despite repeated announcements, the enactment of a successor regulation was delayed until May. This caused a great deal of uncertainty among customers and investors and not least among the banks committed to financing of solar projects. The result was that current projects were delayed and new business in the power plant segment came to a virtual standstill in the first quarter.

In this weak market environment, SOLON generated consolidated revenues of EUR65.2 million in the first three months of 2011 which still fell short of the sales level in the first quarter of 2010 (EUR88.3 million). The weak revenues had a negative impact on the Company's profitability and led to an EBIT loss of EUR17.0 million (Q1 2010: EBIT loss of EUR6.4 million) and a consolidated net loss of EUR21.5 million (Q1 2010: consolidated net loss of EUR8.2 million). This reflects a loss per share of EUR1.25 (prior-year period: loss per share of EUR0.65).

SOLON's sales of photovoltaic installations reached a total output of 32 MW in the first quarter of 2011 (Q1 2010: 43 MW). The weakness of the German market is also reflected in the fact that SOLON generated 80% of Group revenues outside of its home market, primarily in Italy and the U.S. The spinoff of the operating activities of the Austrian subsidiary at the beginning of 2011 reduced the number of employees at all SOLON locations to 797 as of March 31, 2011 (December 31, 2010: 912).

As a consequence of the weak business performance, net debt rose during the quarter to EUR402.1 million (December 31, 2010: EUR369.1 million). Working capital increased to EUR213.0 million compared to year-end 2010 (EUR172.5 million), reflecting a working capital ratio in relation to revenues of the last 12 months of just under 36%. Accounts receivable were reduced significantly and dropped from EUR170.7 million at year-end 2010 to EUR148.4 million as of March 31, 2011. This was, however, in contrast to increased inventories of unfinished products and work in progress totaling EUR42.7 million due to the weaker than expected demand. A third of this amount resulted from project earnings for the 21 MW power plant for the U.S. customer Arizona Public Service which is currently under construction. Demand for solar installations in Germany has gradually picked up since the end of March. Based on the Company's estimation that fewer solar systems were installed throughout Germany in March than was expected at the beginning of the year, it can be assumed that the reductions in the feed-in tariffs based on the installation figures for the months of March to May 2011 may remain significantly below the maximum rate as of July 1. This would be the prerequisite for a relatively balanced development of demand in Germany in the rest of the year. After an initial estimation of the revision of solar subsidies in Italy presented in early May, it is safe to assume that Italy will continue to be attractive as a location for solar investments, not least due to the fact that the subsidy rates will continue to be higher than the German level despite an additional significant decrease. However, the market development may shift more strongly in the future to the segment of private and commercial roof installation with output of up to 1 MW. SOLON sees itself as well positioned in this segment owing to its many years of experience in the implementation of large roof installations in Italy and its product range of specific roof solutions.

The significantly weaker than expected business performance in the first quarter has prompted SOLON management to revise its revenue and income planning for the current year. The Management Board currently assumes that it will not be possible or not entirely possible to make up for the drop in revenues of the first quarter during the rest of the year. It therefore expects that consolidated revenue for 2011 will not surpass that of the previous year. As a consequence of this lower revenue expectation, the income targets were reduced accordingly.

The complete interim report of SOLON SE as of March 31, 2011 is available for download from the Company's website at

SOLON SE Therese Raatz Investor Relations Phone: 030 / 818 79 - 9305 Fax: 030 / 818 79 - 9300 E-Mail:

end of announcement                               euro adhoc


Therese Raatz
Head of Corporate Communications
Tel.: +49 30 818 79-9305

Branche: Energy
ISIN: DE0007471195
WKN: 747119
Index: Midcap Market Index, CDAX, HDAX, Technology All Share, GEX,
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / regulated dealing
Hamburg / regulated dealing
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München / regulated dealing

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