Meyer Burger fights for survival
Published: Friday, Nov 1st 2024, 15:10
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Meyer Burger is facing crucial weeks: The solar technology company urgently needs money to press ahead with the planned relocation of its activities to the USA and thus survive at all. As expected, the Group was in the red in the first half of 2024.
"We have a financing gap in the high double-digit million range and need to close it," said Franz Richter, who recently became CEO and Chairman of the Board of Directors at the same time, in a conference call on Friday. He is working flat out to restructure the Group.
Meyer Burger has entered into negotiations with creditors in order to obtain the necessary funds. "We are currently in discussions with the bondholders. We will be able to communicate the results in the next few weeks," continued Richter, without going into detail.
Meanwhile, Richter has ruled out a capital increase. Analysts anticipate an even greater capital requirement in the range of CHF 100 to 120 million.
Deep red figures
The half-year report published on Friday night shows just how badly the company is doing. Turnover almost halved to CHF 49 million, the operating loss (EBITDA) swelled to CHF 124 million from the previous CHF 43 million and the bottom line was a high loss of CHF 317 million (previous year: -65 million).
Meyer Burger has been struggling with cheap competition from China and overcapacity in the European solar market for some time. In the first half of the year, the sale of solar modules from stock at dumping prices caused losses. This was compounded by write-downs and costs associated with the stalled expansion of US production.
Meyer Burger had to stop the construction of a solar cell production facility in Colorado Springs in September due to a lack of funds. The cells will continue to be produced in Thalheim, Germany, and assembled into solar modules in Goodyear, Arizona. Activities there will be gradually ramped up in order to reach a capacity of 1.4 gigawatts in the future.
Thanks to existing long-term purchase agreements, Meyer Burger can already sell the solar modules produced in Goodyear and continues to expect Group sales to increase to CHF 350 to 400 million and EBITDA to around CHF 70 million by 2026. In the USA, the solar industry is being promoted and better protected against low-cost competition from China.
Job cuts in Europe
Meyer Burger's financial situation remains extremely precarious: at the end of September, the company had only just over 80 million Swiss francs in cash. The sale of assets from the now closed module production facility in Freiberg, Germany, and further sales of products from the warehouse should give the Group some breathing space.
Savings are also still the order of the day. The plan is to further reduce the Group-wide workforce by around 200 to 850 employees in future. The cuts will be made entirely at the expense of European activities, while jobs will be added in the USA. Richter has not yet been able to say how many jobs will be lost in Switzerland.
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