26 March 2020

Soltech Energy – Business Status Update – Sweden and China

In the past month, Soltech Energy Sweden AB (publ) ‘s Swedish operations have signed new orders of just over SEK 40 million and in China, the business is running in principle as before the Coronavirus crisis. The Group has so far managed the crisis well, but we are of course following the development closely and will continuously take the measures that the situation requires.

The Swedish operations

The sale of solar energy in the form of facade and roof solutions in Sweden takes place in six subsidiaries, three of which were acquired during the first quarter of 2020. These companies have all purchased large inventories of products to secure deliveries to our customers in the event of a shortage of goods. from different suppliers. Business is progressing well despite the Coronavirus crisis and within the Group’s investment in the corporate market, the following orders / framework agreements have been signed during the past month.

The subsidiary Swede Energy received three orders for solar power plants last week: one from the property company Vätterhem of SEK 8 million, one from the housing company Willhelm of SEK 3 million and one from HSB Sundsfastigheter of SEK 1.2 million. However, the last month’s biggest deal is the order of SEK 20 million from Castellum, which Soltech Energy published in a separate press release on February 20, 2020.

Swede Energy has also signed a framework agreement that runs over two years with Hemsö Fastighets AB for the Group’s investment in solar energy. Hemsö owns, manages and develops community properties in Sweden, Finland and Germany. Hemsö has completed a procurement of framework contract suppliers in solar energy with a focus on quality, sustainability and service. Swede Energy is one of four framework contract suppliers. The economic value of the framework agreement will depend on the rate at which Hemsö chooses to invest in solar energy on its properties.

The subsidiary Merasol has received an order for a solar cell plant from the Local Government in Gothenburg. The facility is part of a new construction project of a school where PEAB is a general contractor and the order value amounts to SEK 2.5 million. The installation is part of the framework agreement that Merasol has previously with the Local Government in Gothenburg and where solar energy is installed at existing and newly built schools, senior housing and other municipal buildings.

Merasol is also involved in a major energy conversion project that HSB, Brf Måsängen in Partille is implementing. As part of that project, Merasol will supply a solar power plant worth SEK 3 million.

The corona virus creates concern, but at the same time creates opportunities for the Swedish private market

The subsidiary Soldags is the Group’s leading company against the private market in Sweden. Soldags has, like the Group’s other subsidiaries, had a good start in 2020. Soldags finds that some customers are worried and are thinking about another turn before buying a solar cell plant. But for others, a solar cell plant now feels like a safe investment with around 9-10% in annual return on invested capital. Becoming more self-sufficient and thus less dependent on electricity companies and network owners is also a basic security that feels important for both private and corporate customers.

Our responsibility regarding the Corona virus and its impact

The Soltech Group is of course following the development of the Corona virus hour by hour. The most important thing, of course, is the health of our employees and customers. But at the same time, we are focused on keeping business operations going as far as possible during this time for the best of the Group, our employees, shareholders, customers and society. We are convinced that we will achieve this in a long-term sustainable way, even if it would mean that in the short term we will be able to slow down our investments in China and in acquisitions and the development of existing companies. The latter would mainly occur if a total closure of society takes place in Sweden.

Operations in China

The subsidiary Advanced Soltech Sweden AB (publ) “ASAB” has through the Chinese wholly owned subsidiaries Advanced Soltech Renewable Energy Hangzhou Co. Ltd. “ASRE” and Longrui Solar Energy Suqian Co. Ltd. “SUQIAN” today a total of 139 megawatts (MW) of solar energy capacity connected to the electricity grid, distributed to 100 customers. The majority of all installations that ASAB and SUQIAN hold in China are installed in Zhejiang and Jiangsu provinces where close to 100% of the factories (production units) are now in full operation after the Chinese New Year and the subsequent shutdown as a result of the Corona virus.

If necessary, ASRE and SUQIAN have the advantage of being able to sell the electricity produced to the electricity grid / grid owner rather than to the customer. Thus, a closed factory does not mean that you are without income. Then the first quarter of the year due to. lower solar radiation only accounts for about 18% of the annual electricity production for a plant an average year, this affects us to a lesser extent

The market remains very strong in China and the plan to reduce dependence on coal in order to generate electricity remains. We look forward to great opportunities to reduce financing costs as a consequence of our growth. In addition, we are also exploring the possibility of taking advantage of the support packages that are now being launched in China in various forms in order to stimulate growth, for example in renewable energy.

ASRE has an order backlog, including projects under construction, amounting to just over 40 MW, and a project pipeline that we continuously process that exceeds 100 MW and a framework contract portfolio of 650 MW. With this in mind, the need for sales in the short term is lower. Our focus is now primarily on securing financing through bonds, loans and equity for continued growth.

For more information contact:
Stefan Ölander, CEO Soltech Energy Sweden AB (publ) Tel: 070-739 80 00. E-mail: stefan.olander@soltechenergy.com

About Soltech Energy Sweden AB (publ)

Soltech Energy is a comprehensive supplier that develops, sells, installs and optimizes solar energy solutions for our customers’ needs. The group includes the subsidiaries Advanced Soltech Sweden AB (publ) where the Chinese venture is conducted, Soltech Sales & Support, NP Group, Swede Energy Power Solutions, Merasol, Soldags and Takorama. Soltech Energy Sweden AB (publ), is traded on the Nasdaq First North Growth Market under the short name SOLT and has approximately 32,000 shareholders. The company’s Certified Adviser is Erik Penser Bank. Phone: 08-463 83 00. Email: certifiedadviser@penser.se. For more information see: www.soltechenergy.co