The German solar industry expects a recovery in the second half of this year after a string of earnings showed on Thursday the sector has written off the first three months as the low point of 2009.
Conergy, Germany's second-largest solar company by revenue, Phoenix Solar, a builder and operator of solar plants, and solar module maker Aleo Solar posted first-quarter losses but were optimistic the worst was over.
We have already seen a slight upturn in the market in March. In the second half of the year, at the latest, we expect business to pick up considerably, Conergy Chief Executive Dieter Ammer said in a statement.
Phoenix Solar's CEO also said business had picked up considerably in April and May, keeping the company's 2009 outlook of 31 million euros ($42.02 million) in earnings before interest and tax (EBIT), despite a net loss of 6 million euros in the first quarter.
Analysts had widely expected negative results because most companies had already warned that the harsh winter in Germany hurt business in the first three months, making the installation of solar systems on roofs more difficult.
Q-Cells, the world's largest maker of solar cells, and module maker Solon released disappointing results earlier this week, with Q-Cells slashing its outlook for the third time within six months.
Weak first-quarter earnings from Germany, the world's second-biggest solar market, suggest similar news when U.S.-listed industry bellwethers such as LDK Solar, JA Solar, Suntech and Yingli Green Energy report results next week. However, it is also likely that optimism about the industry's future will prevail.
HIT BY FALLING PRICES
The funding-dependent solar sector has been hit by tight credit conditions while selling prices for cells, modules, wafers and silicon are falling, leading to lower margins for the once-booming industry.
But analysts as well have acknowledged that the worst might be over for the industry.
We expect a seasonal pick up in demand as we head into H2 2009 and a year-on-year volume recovery in 2010, Goldman Sachs analysts wrote in a note, adding that they still see a risk for 2009 solar installations to be materially below 2008 levels.
As expected, Q1/09 results marked a disappointing start into 2009, Equinet analyst Sebastian Growe wrote in a note on Phoenix Solar. Analysts also said Conergy's first-quarter EBIT loss of 20.6 million euros was not as steep as expected.
Conergy's shares were 11.1 percent higher at 1312 GMT -- making it one of the top gainers in Germany's stocks universe -- outperforming the FTSE clean tech index, which was down 0.1percent, while Phoenix Solar's shares were 2.1 percent higher.
Solar module producer Aleo Solar -- whose shares were up 3.1 percent -- was also confident despite posting a loss for the first quarter, expecting that demand for its high-quality modules will pick up in the rest of the year.
(Reporting by Christoph Steitz; Editing by Jon Loades-Carter)