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Roth & Rau AG: Difficult market climate and one-off items weigh on quarterly earnings
Roth & Rau AG / Key word(s): Preliminary Results 07.11.2011 18:30 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Roth & Rau AG: Difficult market climate and one-off items weigh on quarterly earnings Hohenstein-Ernstthal, 7 November 2011 - The marked deterioration in the solar energy market climate in recent months has impacted significantly on operations and key earnings figures at Roth & Rau AG. Based on preliminary figures, consolidated sales for the first nine months of 2011 amounted to EUR 146 million (2010: EUR 189.2 million), while earnings before interest and taxes (EBIT) amounted to EUR -76 million (2010: EUR 3.0 million). One-off items of EUR 58 million represent the prime cause of these highly negative earnings figures for the current financial year to date. In the first half of the year, Roth & Rau AG had still expected the market to stabilise at a low level. However, the uncertainty surrounding the future structure of solar promotion programmes in key European markets in the third quarter led to a further drastic decline in demand for solar modules and systems. In conjunction with existing surplus market capacity, numerous international cell and module manufacturers have substantially cut back their production capacities. Furthermore, financing terms for new solar projects have deteriorated significantly on account of increased global economic risk and uncertainty on the financial markets, as a result of which companies have postponed or even cancelled planned capacity expansion investments. Against this backdrop, it was not possible to complete most of the projects currently underway in the third quarter of 2011 on schedule, as several customers delayed final acceptance of the products. This impacted on the company's sales and earnings strength. It was also not possible to implement the sale of inventories budgeted for the third quarter in the way originally planned, thus leading to impairment requirements. A further consequence of the market turbulence is that the creditworthiness of several customers has deteriorated significantly, as a result of which Roth & Rau has been obliged to review and adjust the value of individual receivables. Based on preliminary figures, consolidated sales amounted to EUR 54 million in the third quarter of 2011, thus falling 24% short of the previous year's figure (2010: EUR 70.4 million). Preliminary EBIT, which amounted to EUR -52 million, was negatively affected by one-off items of EUR 45 million. This figure includes write-downs of trade receivables and inventories, as well as provisions for contractual risks and structural measures to be implemented. Furthermore, it was necessary to post impairments of intangible assets. The Management Board cannot exclude the possibility of further earnings risks arising in the current fourth quarter. These could lead to additional one-off items of around EUR 15 million. Countermeasures already in implementation Roth & Rau has already reacted to the significant downturn in demand and introduced short working hours in its production divisions, initially for a limited period of half a year. This means that the company will be able to respond flexibly, and at short notice if need be, to any potential recovery in its customers' willingness to invest. The CRiSP cost and structure optimisation programme is now under review by the new Management Board at Roth & Rau AG, with its main components being maintained and accelerated. The programme was introduced with the aim of creating more flexible long-term cost and organisational structures to enhance the company's ability to cushion increasingly frequent fluctuations in demand in the solar industry. Roth & Rau AG will be publishing its detailed interim report as of 30 September 2011 on 15 November 2011. Contact: Roth & Rau AG Prof. Dr. Silvia Roth Tel.: +49 (0) 3723/671-3333 E-mail: investor@roth-rau.de 07.11.2011 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: Roth & Rau AG An der Baumschule 6-8 09337 Hohenstein-Ernstthal Germany Phone: 03723 6685-0 Fax: 03723 6685-100 E-mail: info@roth-rau.de Internet: www.roth-rau.de ISIN: DE000A0JCZ51 WKN: A0JCZ5 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, München, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------
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