SolarWorld looks for a fresh start

Spooked customers will begin returning to SolarWorld after the recent conclusion of its restructuring process, claims chief executive Frank Asbeck, although investors appear unconvinced.

Asbeck blames SolarWorld’s disappointing sales performance in the first half of 2013 – with shipments down 30% to 233MW at a time when installations are expanding globally – on customer concerns about the company’s restructuring process.

The restructuring and the resulting negative headlines created “noticeable uncertainty among our customers”, causing “considerable harm” to the company’s top line, Asbeck says.

Total first-half revenues fell to €201m ($267m) from €340m last year.

“Our sales team had to work hard to convince customers that we are experience a generalized industry crisis affecting nearly all solar manufacturers,” SolarWorld says in its first-half earnings report.

In particular, a number of erstwhile partners in the US, which SolarWorld considers its “second home market”, began considering SolarWorld modules as “not bankable”.

Under the restructuring deal, SolarWorld shareholders will see 95% of their investments wiped out, while Qatar Solar will sink €35m into the company – and Asbeck €10m of his own money – to keep it afloat.

Asbeck says that deal – expected to be finalised by early 2014 at the latest – “will have a positive effect on our business for the rest of the year”.

Investors, however, were not so sure, sending SolarWorld shares down more than 7% in early trading on 14 August, leaving the company with a market capitalisation of less than €52m.

On the bright side, SolarWorld significantly reduced its losses during the first half of the year, nearly halving its net loss to €82m – compared to a deficit of €161m last year.

The company says it expects the global PV industry to enter its “final phase” of consolidation in 2014.