Erlangen, 13 October 2010 Solar Millennium AG (ISIN DE0007218406) is reducing its forecasts for the current fiscal year from € 350 million to approximately € 150 million of sales and from € 30 million to a neutral or slightly negative EBIT. This change is mainly due to delays in the closing of the financing for the planned US power plants Blythe 1 and 2 in California. These delays are inter alia based on changes by the US Department of Energy (DoE) and other involved US authorities in the procedure for the Loan Guarantee Program Application, therefore postponing the financial close, originally planned prior to the balance sheet date on 31 October 2010. As a result, the corresponding sales and earnings from the project development and sales of stakes are expected to be generated in the next fiscal year.
The Executive Board had not ruled out these forecast deviations upon publication of the consolidated interim report on 13 September. The most recent negotiations with the DoE showed that the financing could no longer be concluded by the end of the fiscal year.
The approval processes for the construction permits of the power plant projects in the US, Blythe as well as other sites, on the other hand, are still on schedule. The California Energy Commission has announced on their website that it will come to a decision on the approval of two 242-megawatt power plants at the Palen site on 15 December. As for the world's largest solar site in Blythe, which consists of four 242-MW power plants, Solar Millennium still expects the final construction permit by the Bureau of Land Management (BLM), which reports to the US Department of the Interior, in October.
Regardless of the point at which the financing is concluded, Solar Millennium AG currently plans to begin construction on the Blythe 1 and 2 solar-thermal power plants as early as December. This is intended to ensure cash grants from the American Recovery and Reinvestment Act of 2009 from President Barack Obama. Solar Millennium has sufficient resources to finance the first construction measures planned, largely supported by the positive operating cash flow expected in the current fiscal year.
The Spokesman of the Executive Board of Solar Millennium, Thomas Mayer, emphasized: "At the end of the fiscal year, we will have reached two of three milestones at the world's largest solar site: the approval by the California Energy Commission and the construction permit by the US Department of the Interior. The third challenge, the conclusion of financing, will be postponed to the next fiscal year due to external factors, namely procedural changes in the approval process of the Loan Guarantee Program. This delay will have a negative impact on the current annual result, but not on the realization of the power plants and therefore not on the long-term success of the Solar Millennium Group."
Oliver Blamberger, CFO of Solar Millennium, clarified the strategic importance of the planned solar power plants in the US: "Successful realization of the power plants in Blythe should secure us a significant portion of the operating business with continuous and stable sales beyond the next few years. To this end, a considerable amount of resources had to be used in the current fiscal year, especially now that the construction of two power plants is to begin simultaneously as opposed to the one plant originally planned. The impact of these business activities for next year´s sales and EBIT will be shown in the guidance for the fiscal year 2010/2011 which will presumably be announced together with the preliminary results 2009/2010."
The four Blythe power plants and the two Palen power plants together are expected to supply roughly 3,300 gigawatt hours of electricity annually and thereby save some three million tons of carbon dioxide per year. The overall capacity of the planned solar power plants thus exceeds that of a nuclear power plant or a modern large-scale coal-fired power plant.
About Solar Millennium AG:
Solar Millennium AG, Erlangen, is an international company in the renewable energy sector, with its main focus on solar-thermal power plants. Together with its subsidiaries and associates, the Company specializes in parabolic trough power plants and has managed to take a globally leading position in this field. Solar Millennium strives to further extend its expertise in the area of solar-thermal power plants with the aim of achieving and securing sustainable technology leadership. As such, the Company covers all important business sectors along the value chain for solar-thermal power plants: from project development and financing to the technology and the turnkey construction and operation of power plants. In Spain, Solar Millennium developed Europe's first parabolic trough power plants and realized these together with partners. Additional projects are planned around the world with an overall capacity of more than 2,000 megawatts: here the current regional focus is on Spain, the US, India, China, the Middle East and North Africa.
About solar-thermal power plant technology:
Solar-thermal power plants generate electricity by converting solar radiation into heat energy. In a parabolic trough power plant, trough-shaped mirrors concentrate the incidental radiation onto a pipe in the focal line of the collector. Its absorption heats a fluid heat medium in the pipe, generating steam in the power block through a heat exchanger. As in conventional power plants, the steam powers a turbine to generate electricity. By integrating thermal storage, electricity can be supplied on demand, even after sunset.
For further information:
Solar Millennium AG
Dipl.-Ing. Sven Moormann (Corporate Communications)
Dr. Stefan Eckhoff (Investor Relations)
Tel.: +49 (0)9131 9409-0