DGAP-News: Solar Millennium AG releases its interim results - earnings forecast for the full year adjusted

Solar Millennium AG  / Key word(s): Interim Report/Profit Warning

13.09.2010 08:31 

Dissemination of a Corporate News, transmitted by DGAP - a company of
EquityStory AG.
The issuer / publisher is solely responsible for the content of this announcement.

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  - Sales of EUR 37.1 million according to IFRS from 1 November 2009 to 30
    June 2010 (previous year: EUR 48.5 million) and EBIT of EUR -26.7
    million (previous year: EUR 20.9 million) after extraordinary  
    charges and high pre-investments into projects

  - EBIT forecast for the full year adjusted by approximately EUR 15
    million to ca. EUR 30 million due to extraordinary charges and
    restructuring of the originally planned project financing of Ibersol
    assuming unchanged sale expectations

  - Transactions with the strongest sales and earnings impact for the
    current reporting period expected in the last quarter; interim results
    as a snapshot which does not reflect the considerable progress made
    with the projects

  - Retroactive increase in sales (EUR 42.4 million to EUR 48.5 million)
    and EBIT (EUR 5.9 million to EUR 20.9 million) in the interim financial
    statements of the previous year as a result of the extraordinary audit
    concluded in June as well as the current audit procedures

Erlangen, 13 September 2010 Solar Millennium AG (ISIN DE0007218406) has
concluded its interim reporting period as of 30 June 2010 with consolidated
sales of EUR 37.1 million (previous year: EUR 48.5 million) and EBIT of EUR
-26.7 million (previous year: EUR 20.9 million) in accordance with IFRS.
Although the interim results fall short of the previous year's respective
result, Solar Millennium has reached important milestones in the current
fiscal year. The approval process for power plant projects in the US, in
particular, is on schedule. However, these achievements will not be shown
in the interim financial statements at hand, as they can only be recognized
in the balance sheet after the approval phase has been completed. The
Executive Board still plans to generate the respective sales and earnings
effects in the ongoing fiscal year with both the US projects and Ibersol
and thus continue along the path of growth.

Sales in the first eight months of the current fiscal year were largely
generated in the segments of Technology and Power Plant Construction for
the Andasol 3 parabolic trough power plant in southern Spain and through
the work being finished for the Egyptian hybrid power plant in Kuraymat as
well as in the segment of Project Development. The negative interim result
is attributable to one-time charges in connection with former CEO Prof. Dr.
Utz Claassen's signing fee as well as to consistently high pre-investments
in projects and the Company's growth, particularly in the US. Moreover,
during the realization of Ibersol, the fourth solar power plant project by
Solar Millennium in the south of Spain, the recent uncertainties regarding
the Spanish feed-in tariff regulation for renewable energy have caused
delays.

The Executive Board still aims to generate sales of EUR 350 million on a
Group level in the current fiscal year. The original EBIT target of EUR 45
million will likely be reduced by approximately EUR 15 million to some EUR
30 million as a result of the extraordinary charges already mentioned above
as well as a planned change in the financing structure of the Spanish power
plant project Ibersol. One requirement for reaching the sales and EBIT
forecast is the scheduled conclusion of the project financing for Ibersol
as well as the Blythe project in the US by the balance sheet date of 31
October 2010. Should the planned closing of these transactions take place
after the balance sheet date, there could be a considerable deviation from
the forecast.

The Speaker of the Executive Board of Solar Millennium, Thomas Mayer,
emphasized: 'The interim result is a snapshot that does not reflect the
considerable progress made with our projects.' Given the extraordinarily
high project volumes, the Company's sales and earnings structure is
characterized by a few singular events per fiscal year, which this year did
not materialize in the first eight months and will not be shown in the
balance sheet before the approval process has been completed. 'During this
time, our teams performed the preliminary work needed to bring the upcoming
financing of the planned solar power plants to a close', Mayer further
stated.

One important milestone in the financing and construction start of Ibersol
was the sale of 50% of the Ibersol project to Ferrostaal completed at the
end of August 2010, i.e. after the interim reporting date. The plan is to
sell additional stakes to institutional investors and profit participation
rights of remaining stakes to a fund similar to the Andasol 3 model.

In order to finish the solar power plant by mid-2013 at the latest
according to the schedule originally set, the Executive Board plans to
restructure the financing of Ibersol to the effect that the stake
originally intended for sale to a fund is reduced in size to benefit entry
by institutional investors. This should ensure the efficient start of
construction and thus allow the schedule to be met, but it would also mean
a reduction in the earnings originally planned, only some of which can be
offset in the event of a successful conclusion of projects in the US.

The Solar Millennium Group's focus for the projects planned in the US at
the moment is on the Blythe location in California. At this site, the
construction of two solar-thermal power plants with a capacity of 242
megawatts each and an investment volume of more than one billion US-Dollar
per
plant is scheduled to start in 2010. In the current fiscal year, all
planned stages of the approval process thus far were successfully reached
for this location within the set timeframe. The final construction permit
by the responsible US-American authorities is expected in autumn 2010.
Another goal is to conclude the financing by the end of October 2010.

Oliver Blamberger, CFO of Solar Millennium, added with respect to the
proposed US solar power plants: 'With billion Dollar large scale projects,
we cannot primarily be geared by reporting periods, since the high
complexity of the approval process with different US authorities,
especially in connection with the loan guarantees, limits the ability to
exactly time the completion of this type of projects considerably. The
successful realization of the US power plants scheduled to be built at
Blythe - after all one of the largest infrastructure projects in the USA -
would secure a significant part of the operating business with continuous
and stable sales in the next few years.'

The comparable figures given from the previous year have also been adjusted
from those published last year as a result of the extraordinary audit
concluded by Deloitte in June and the audit procedures in the course of
issuing this year's interim report. Sales were retroactively increased from
EUR 42.4 million to EUR 48.5 million and EBIT from EUR 5.9 million to EUR
20.9 million as of 30 June 2009. In March 2010, Solar Millennium's
Supervisory Board at the request of the Executive Board had commissioned
the auditing company Deloitte to carry out an extraordinary audit in
accordance with Section 111 Paragraph 2 Sentence 2 of the Stock Corporation
Act (AktG). The aim was to dispel any doubt or questions regarding
consolidation practices in the fiscal years 2005/2006 to 2008/2009. The
resulting correction and further adjustments pursuant to IAS 8 are shown in
the interim financial statements released today, which can be downloaded at
www.SolarMillennium.de/Investoren.


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Information and Explaination of the Issuer to this News:

About Solar Millennium AG:

Solar Millennium AG, Erlangen, is an international company in the renewable
energy sector, with its main focus on solar-thermal power plants. Together
with its subsidiaries and associates, the Company specializes in parabolic
trough power plants and has managed to take a globally leading position in
this field. Solar Millennium strives to further extend its expertise in the
area of solar-thermal power plants with the aim of achieving and securing
sustainable technology leadership. As such, the Company covers all
important business sectors along the value chain for solar-thermal power
plants: from project development and financing to the technology and the
turnkey construction and operation of power plants. In Spain, Solar
Millennium developed Europe's first parabolic trough power plants and
realized these together with partners. Additional projects are planned
around the world with an overall capacity of more than 2,000 megawatts:
here the current regional focus is on Spain, the US, India, China, the
Middle East and North Africa. More information is available at
www.SolarMillennium.com

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

Dipl.-Ing. Sven Moormann (Corporate Communications)
Dr. Stefan Eckhoff (Investor Relations)

Tel.: +49 (0)9131 9409-0
Email: presse@SolarMillennium.de / investor@SolarMillennium.de
Web: www.SolarMillennium.de

This press release constitutes neither an offer to sell nor the
solicitation of an offer to buy any securities of Solar Millennium AG. The
press release shall not form the basis for investment decisions regarding
securities of the company. Any such investment decision of a prospective
investor shall be based solely on such prospective investor's own
investigations and assessments.

This release contains forward-looking statements. These statements are not
a description of past facts, but rather relate to expectations and opinions
of Solar Millennium AG. These statements are based on current plans,
assessments and forecasts of the company. Investors should not rely on
these statements. Forward-looking statements must be understood in the
context of the circumstances existing at the time when they were made. The
company assumes no obligation to update the forward-looking statements in
this release based on new information or future events. Forward-looking
statements always involve risks and uncertainty. Due to a multitude of
factors, actual events and actual developments may differ significantly
from the forward-looking statements contained herein. This press release
was originally prepared in German. The translation of this release or parts
thereof is considered as a service for journalists, analysts and investors
who are not able to understand German. Only the German version is legally
binding.



13.09.2010 08:31 DGAP's Distribution Services include Regulatory Announcements, 
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