Conergy Slumps After Reducing Earnings Forecast: Frankfurt Mover
Conergy AG (CGYK), a German solar-energy company, fell the most in 1 1/2 years in Frankfurt trading after a canceled contract prompted a cut in its profit forecast.
Conergy slumped as much as 24 percent, the biggest intraday decline since March 2011, after saying earnings before interest, tax, depreciation and amortization will be negative this year. The manufacturer previously predicted positive annual Ebitda.
The company, owned by creditors since 2011 after dwindling demand and increased competition led to a restructuring, booked a $21 million fee from terminating a supply agreement with MEMC Electronic Materials Inc. (WFR) The $600 million deal for polysilicon wafers was supposed to run to 2018, according to Conergy, which no longer produces solar cells and has no use for the wafers.
“Conergy’s earnings forecast for 2012, which assumed a slightly positive Ebitda, is no longer viable,” the Hamburg- based company said in a statement late yesterday. “The company now expects a negative Ebitda for 2012 in the mid-double-digit million euro range.”
Conergy fell as much as 11.3 euro cents, and was down 10 cents at 36.5 cents as of 10:17 a.m. in Frankfurt, valuing the company at 58.3 million euros.
The contract cancellation means Conergy can operate “more flexibly” and reduce raw-material costs, Chief Operating Officer Alexander Gorski said in a separate statement. The termination “has no effect on our liquidity,” Antje Stephan, a spokeswoman, said today by phone.
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