3W Power, the holding company of AEG Power Solutions (AEG PS), today announced results for Q2 2012. At €87.0 million, order intake was down 31.7% year-on-year and down 4.5% compared to the prior quarter. The reduction is principally due to anticipated weak demand in the polysilicon market. Revenue in Q2 2012 was €98.2 million, down 8.0% compared to Q2 2011 (€106.7 million) but up 17.6% compared to the prior quarter, driven by a resumption in growth in Solar. EBITDA was positive again in Q2 2012 at €4.8 million, after one-time charges of €1.2 million.

The economic environment remains challenging with many risk factors weighing on confidence no longer just in Western Europe but around the world. Fortunately our businesses are not uniformly affected. With growth coming from Solar, the RES business segment is expected to return to double-digit EBITDA margins in H2 2012. The EES business segment will have positive EBITDA margins for the remainder of the year.

The company is systematically addressing its cost base to ensure profitability in a difficult trading environment.

Orders of €37.2 million in Renewable Energy Solutions (RES) were low in Q2 down 45.7% year-on-year. The drop is the result of anticipated weak demand in the polysilicon market and delays in financing of certain customers’ solar projects. Deliveries resumed however in Q2 with RES revenue up 56.4% compared to the prior quarter largely driven by the continued growth in areas outside of Western Europe in our Solar business. Revenue, at €51.6 million in Q2 2012, was down 10.0% compared to Q2 2011 revenue of €57.4 million with the increase in Solar revenue not sufficient to offset the weakness in POC. EBITDA for RES was €10.1 million compared to €23.8 million in Q2 2011 again a reflection of the drop in highly profitable POC revenues.

For full year 2012, POC will have lower orders and revenue than in 2011. The drop in the spot market for polysilicon indicates an oversupply situation which we will continue to closely monitor over the next few quarters. It remains a strategic priority of RES to continue diversifying the Power Controller business beyond polysilicon applications.

For the full year 2012, Solar orders and revenue are expected to exceed 2011. “The signing of a major framework contract with Activ Solar in July 2012 and the growing pipeline of projects confirms the success of our solar strategy. Our approach is based on a product range with highly-efficient components for solar power plants, providing customers with a truly competitive solution”, comments Horst. J. Kayser, CEO of 3W Power/ AEG Power Solutions. “Utilizing our existing global footprint to tap solar growth is another very important part of our strategy. Eastern European countries and India fueled our solar growth in 2011.” Orders from growth regions such as Eastern Europe, India, Southern Africa and the USA are expected to offset and over-compensate expected market contractions in Western Europe.

On August 7, the Group signed a Sales Purchase Agreement with Solar21 to sell EMED, a 5.75MW solar installation in Puglia, Italy for a total consideration of up to €24.3 million including the assumption of €17.4 million of debt. Jeffrey Casper, newly appointed CFO of 3W Power/ AEG Power Solutions, states: “We are very pleased to have signed the agreement in difficult market conditions. Our exit from the farms further streamlines our business portfolio and solidifies our balance sheet. The original purpose of the farms was to highlight AEG PS’s capabilities in launching its Solar business. The sale of the farms represents a successful conclusion to this endeavor and is expected to close by the end of October.”

Source: Business Wire