Year-end report 2018 SolTech Energy Sweden AB (publ)

SolTech Energy reports strong earnings improvement in the Group

 

2018 in summary

  • Net sales amounted to SEK 53.7 (49.8) million.
  • The Group’s operating profit (EBIT) amounted to MSEK 5.2 (-17.7). The Group’s profit after financial items and tax amounted to MSEK -15.5 (-22.3).
  • Earnings per share amounted to SEK -0.35 (-0.72).
  • The business area energy increased sales to MSEK 48.8 (10).
  • The parent company’s net sales amounted to MSEK 11.3 (4.6). After other income, changes in inventories and included intra-group sales of a non-recurring nature, revenues totaled MSEK 14.3.
  • Cash flow amounted to SEK 0.6 (6.9) million. Cash flow has been affected by, among other things, funds raised from the new issue carried out at year-end 2017/2018 and where SEK 49.7 million was paid in 2018.
  • The Group’s investments in solar power plants in China amounted to SEK 542 M (150) on the balance sheet date.
  • Wasa Rör has been sold as of March 1, 2018, which resulted in a reduction of the Group’s sales by almost SEK 30 million compared to 2017.

Second half of 2018

  • Net sales amounted to SEK 35.2 (25) million.
  • Operating profit for the period (EBIT) amounted to SEK 8.3 (-8.6) million.
  • Cash flow for the period amounted to SEK -6.4 (35.3) million.

After the end of the reporting period

  • Acquisition of majority stake in Nyedal Solenergi, a Halmstads based solar energy company with sales of SEK 22 million with a positive result for the fiscal year 2018.
  • Acquisition of majority stake in NP Gruppen AB, Stockholm-based roof specialists with SEK 85 million in sales and SEK 13 million in profit for fiscal year 2018.
  • The subsidiary ASAB has issued an institutional corporate bond of SEK 170 million for the financing of additional solar power plants in China. The bond is included as part of an agreement with JOOL Markets, which comprises a green bond framework totaling SEK 1,500 million.

 

CEO comment

We are putting an exciting and exciting year behind us. We have invested large personnel and financial resources in building a stable platform for the future in terms of our own developed products, the business in China and, not least, an increased focus on our home market. We improve profit significantly but report minus figures for the year after financial items. Despite this, I feel that we are stronger than ever before with a good product portfolio, a stronger market trend for integrated and aesthetic solar energy,                               a well-functioning business model in China and, not least, a very successful start in our new acquisition strategy.

Acquisition strategy. During the fourth quarter, we launched a new acquisition strategy and have so far acquired two companies according to the plan we presented, Nyedal Solar Energy and the NP Group. We have already begun to see the competitive advantages in sales, personnel and purchasing. The work of identifying additional potential acquisition candidates continues with high intensity. We believe that this complementary growth strategy is strategically correct, since, in addition to pure economic growth, it also broadens the sales platform of SolTech’s own products and thereby also increases the margin.

Aesthetic and building-integrated solar energy, according to industry representatives worldwide, is a clearly increasing trend. Both private individuals and companies believe that the value of their house / property increases if they install aesthetic solar energy when compared to surface-mounted solar cells. We have three products in this category that we will focus on in the coming years: SolTech ShingEl, RooF and Façade.

In March 2018, SolTech sold the wholly owned subsidiary Wasa Rör. The purpose was to streamline operations and focus all resources on the Group’s business areas within solar energy in the Nordic region and China. The sale meant that we lost almost SEK 30 million in sales for 2018. Despite this, we are landing at a higher turnover in 2018 compared to 2017 due to increased sales in both the parent company and China.

In China, ASRE continues to develop strongly both in terms of sales and earnings. Including an acquisition in China of a 24.44 MW solar energy portfolio, which is planned to be implemented in March, we have installations corresponding to 92.82 megawatts (MW) connected. These are calculated on a rolling 12-month period generating approximately SEK 124.5 million in current income.

We have so far funded the expansion in China by issuing green bonds through the subsidiary Advanced SolTech Sweden AB (publ) ASAB, in combination with equity from the owners, SolTech Energy and Advanced Solar Power Hangzhou Inc, ASP and a bank loan from Bank of China. In 2018, ASAB issued three green bonds, SOLT2-4, together with Avanza Bank, which generated a total of SEK 346 million. In January 2019, a four-year bond, SOLT5, was issued in cooperation with JOOL Markets, which was directed to institutional investors and subscribed to SEK 170 million. At the time of writing, a total of SEK 805 million has been invested in China and we will soon pass 100 megawatts of installed solar power capacity with good profitability.

In order to further focus on the sale of SolTech’s products and in parallel to ensure continued growth in China, SolTech’s Board of Directors decided that the undersigned should be appointed new CEO of the Company as of 31 August. At the same time, former CEO Frederic Telander took over as chairman, which was also adopted at an extraordinary general meeting. This change means that both the Swedish and Chinese businesses get the right focus while Frederic and I can continue to work closely together for the Group’s best interests.

At Group level, sales increase, despite the sale of Wasa Rör, and the loss is decreasing. The next step is to move from “red” to “black”, ie. to start making money. Here, SolTech ShingEl, SolTech RooF and SolTech Facade will contribute to our future growth and profitability. On top of this, we expect continued strong development in China and our existing and future subsidiaries.

 

Sincerely,

Stefan Ölander, CEO

For more information, please contact: Stefan Ölander, CEO of SolTech Energy Sweden AB (publ. Tel: +46 70 739 80 00. E-mail: stefan.olander@soltechenergy.com

The information in this press release is such that SolTech Energy Sweden AB (publ) must publish in accordance with EU Regulation No. 596/2014 on Market Abuse. The information was submitted through the above contact person’s agency for publication on February 21, 2019 at. 13:40 CET.

About SolTech Energy

SolTech Energy develops and sells aesthetic and building-integrated solar energy products for all types of real estate – commercial, public and residential. The products are part of a building’s outer shell in the form of a roof or a wall with integrated solar cells for the production of electricity. The Group also conducts operations in China where the business model consists of financing, owning and operating solar power plants on customers’ roofs and selling all the electricity that is produced. The Group also includes the subsidiaries Nyedal Solenergi and the NP Group and the jointly owned companies ASAB in Sweden and ASRE in China. SolTech Energy Sweden AB (publ) is traded on First North at Nasdaq Stockholm under the short name SOLT and has about 15,000 shareholders. The Company’s Certified Adviser Erik Penser Bank Telephone: +46 8 463 83 00. Email: certifiedadviser@penser.se. More info at: www.soltechenergy.com

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