3 November 2020

Soltech Energy Sweden AB (publ) quarterly report for the period July – September 2020

Strong growth and four acquisitions during the third quarter

Soltech continues to grow and delivers a strong third quarter with a 46 percent increase in sales and a 45 percent increase in operating profit (EBIT). During the first half of the year, we completed four acquisitions and during the third quarter, four more were completed.

CEO comment:
– We live in a new reality with the pandemic hanging over us. At Soltech, however, we see signs of an even stronger market for our competitive offerings when both
Private individuals, companies and the public sector are investing more and more in solar energy

Third quarter in brief

  • The Group's revenues in the quarter amounted to SEK 127.2 (87.3) million. An increase of 45.7%
  • Revenues in the Swedish operations grew to SEK 84 M (51.9), an increase of 61.8%
  • The Group's profit before depreciation (EBITDA) amounted to SEK 38.9 (30.2) million. An increase of 28.8%
  • The Group's operating profit (EBIT) amounted to SEK 23.1 (15.9) million. An increase of 45.3%
  • Profit for the period after tax amounted to SEK -18.1 (6.4) million. The result was affected by unrealized exchange rate differences in the Chinese operations by SEK -8.5 (10.8) million
  • The period's cash flow for the Group amounted to 85.5 (-76.3) MSEK. The cash flow for the period was, among other things, positively affected by completed new issues
  • Earnings per share amounted to -0.31 (0.13)
  • Covid-19 is estimated to have had a certain impact on the Swedish operations in the quarter, but order intake is still good
  • Operations in China have made a strong quarter with 38.4 million kWh produced. However, revenues were negatively affected in the period by approximately SEK 2 million due to temporary price reductions on electricity as a direct result of Covid-19. The quarter was also affected by unrealized price effects in the Chinese operations of a total of SEK -8.5 (10.8) million. A total of 143 MW of installed capacity (solar power plants) at the end of the quarter

First nine months in summary

  • Total operating income amounted to SEK 336.1 (236.1) million. An increase of 42.4%
  • The Group's operating profit before depreciation (EBITDA) amounted to SEK 87.3 (68.6) million. An increase of 27.3%
  • The Group's operating profit (EBIT) amounted to SEK 43.9 (38.2) million. An increase of 14.9%
  • Profit for the period after financial items, currency effects and tax amounted to SEK -60.6 (-6.2) million
  • Covid-19 had a certain impact on Swedish operations during the period. The primary effects have been deferred customer meetings and orders
  • Covid-19 is estimated to have had a negative impact on revenues in the Chinese operations during the period of approximately SEK 12.5 million. The reasons for this are due to the fact that a larger than normal share of the electricity produced has been sold to the grid instead of directly to the customer and then at a lower price per kWh. Some customers' production facilities in China were also closed until the end of May

Significant events during the period

  • During the quarter, Soltech's subsidiary in China, ASRE, signed five orders that are estimated to generate a total annual revenue of SEK 12.7 million, or approximately SEK 253.9 million under the agreements 20-year maturities
  • The Board of Directors of Soltech Energy Sweden AB (publ) decided, with the support of the Annual General Meeting's authorization, to carry out a rights issue of approximately SEK 98 million to finance continued expansion through acquisitions and to develop existing subsidiaries. In addition to the rights issue, there was an opportunity to decide on an over-allotment issue of SEK 46 million. The rights issue was oversubscribed by 590 percent, the over-allotment issue was completed in full and Soltech received a total of just over SEK 144 million before issue costs
  • Soltech acquired 60 percent of the shares in Miljö & Energi Ansvar Sverige AB with access on September 1, 2020
  • Soltech's subsidiaries, Swede Energy, Soltech Sales & Support and Measol will build Sweden's largest solar and direct current plant with Ferroamp. The order value is just over SEK 3 million
  • Soltech and PowerCell Sweden AB (publ) have signed a Nordic co-operation agreement to develop solutions for customers that include both the Soltech Group's products for solar energy and PowerCell's products for storage.
  • Soltech's subsidiary, Advanced Soltech, raises SEK 131.5 million before issue costs via subscription of newly issued preference shares. This is in order to take advantage of the business opportunities the company has in China. Soltech continues to own more than 50% of the shares in Advanced Soltech after the issue
  • In connection with the Government's budget bill, two important changes were announced for the Swedish solar energy market. The kW limit for tax liability for self-produced solar energy is proposed to be raised at the turn of the year, from the current 255 kW installed power to 500 kW. At the same time, a new deduction is also proposed for the installation of green energy (private households). This includes both solar cells and charging options for e-cars, among other things
  • Eurocommercial Properties chose Soltech's subsidiary Swede Energy Power Solutions as a partner in its investment in Solenergi. Eurocommercial Properties installs solar energy at its remaining shopping centers in Sweden and a total of 1,658 kWp of solar energy solutions will be installed, which is estimated to produce approximately 1,473,709 kWh / year
  • Soltech acquired 80 percent of the shares in Takrekond in Småland AB and 100 percent of the shares in Takrekond in Kalmar AB with access on October 1, 2020
  • Soltech acquired 60 percent of the shares in Din Takläggare i Värmland Dalsland AB with access on 1 October 2020

Significant events after the reporting period

  • Soltech's subsidiary Soltech Sales & Support has received orders via Bergman and Höök Byggnads AB to deliver semi-transparent solar cells to the end customer Wallenstam. Order value approx. SEK 7 million
  • Soltech's subsidiary in China, ASRE, has signed orders that are estimated to generate annual revenues of just over SEK 1.9 million, or approximately SEK 38.7 million during the agreements' 20-year maturities