EANS-News: Sunways AG / Third quarter 2012 marked by market and industry environment

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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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Subtitle: - Earnings impacted by development of prices as well as
sales and production volumes - International expansion of
distribution channels

Financial Figures/Balance Sheet/quarterly report/9-month report

Konstanz (euro adhoc) - Business operations of Sunways AG (SWW:GR,
SWWG.DE, ISIN DE0007332207) in the third quarter of 2012 were
impacted by the situation in the markets, such as the continuously
prevailing global oversupply of components for solar systems, as well
as by economic framework conditions, mainly the Euro crisis. The
demand for photovoltaic products and solutions decreased
significantly in the third quarter. In Germany, the amendment to the
Renewable Energies Act (EEG) adopted with retroactive effect led to a
marked decline in new system installations. Demand in Italy also
declined when the Conto Energia 5 came into force. In addition, from
July through September liquidity pressures experienced by many
companies in Germany and abroad resulted in a high supply level in
the markets and, correspondingly, strong pressure on prices. "At the
current level, manufacturers, in particular those from Europe, are
hardly able to charge cost-covering prices", says Michael Wilhelm,
Chairman of the Management Board of photovoltaics specialist Sunways.

Development of Group operations In the months of July through
September 2012, sales revenues of Sunways Group amounted to EUR 11.5
million, a decline against the prior year quarter by more than 50
percent (Q3/2011: EUR 23.3 million). The operating loss (EBIT) of EUR
11.2 million was at about the same level as in the third quarter of
2011 (Q3/2011: EUR -11.8 million). Successfully implemented cost
reduction measures with respect to workforce and raw materials as
well as other expenses were more than offset by necessary inventory
write-downs across all product segments. Taking into account deferred
taxes relating to loss carry-forwards, earnings after taxes in the
third quarter of 2012 amounted to EUR -8.1 million (Q3/2011: EUR -8.7
million).

Sales revenues of EUR 39.1 were generated in the first nine months of
2012 (9M/2011: EUR 84.2 million). During that same period, operating
losses (EBIT) amounted to EUR 24.5 million (9M/2011: EUR -21.6
million). Earnings after taxes for the first three quarters of the
current fiscal year were EUR -14.3 million; earnings after taxes as
of 30 September 2011 had amounted to EUR -11.2 million - including
the earn-out relating to the sale of MHH Solartechnik.

In the third quarter of 2012, sales revenues in the amount of EUR 5.5
million were generated in international markets (Q3/2011: EUR 9.9
million). Thus the international sales quota rose to 47.8 percent
(Q3/2011: 42.5 percent). Thanks to sales of solar cells to LDK Solar,
Asian sales contributions increased to 11.3 percent. Total
international sales generated by the Sunways Group in the first nine
months of 2012 amounted to EUR 17.1 million or 43.7 percent of total
sales revenues. During that period, the most important markets for
Sunways in terms of volume were Italy, Greece and France. In the
solar module and solar inverter segments, the Company gained access
to some of the emerging European solar markets during that period.

Expansion of sales markets for solar modules and solar inverters At
EUR 2.9 million, sales revenues in the solar cell segment declined by
76.0 percent against the comparable prior year quarter (Q3/2011: EUR
12.1 million). The sales volume of solar cells (measured in terms of
capacity sold) decreased by 50.8 percent to 5.9 megawatts peak
(Q3/2011: 12.1 megawatts peak). The segment's operating result (EBIT)
in the third quarter of 2012 amounted to EUR -5.8 million (Q3/2011:
EUR -4.0 million). As a result of the weak demand and constrained
solar module production activities at Sunways, short-time working
prevailed almost throughout the quarter. In the first nine months,
the segment's sales revenues amounted to EUR 12.8 million (9M/2011:
EUR 46.1 million); the solar cell sales volume was 22.0 megawatts
peak (9M/2011: 45.9 megawatts peak). The operating result declined to
EUR -8.3 million during that same period (9M/2011: EUR -6.9 million).
The development of earnings in the segment was due to drastic price
declines in the market, inventory write-downs and reduced capacity
utilization.

In the solar module segment, sales revenues of EUR 3.4 million were
generated in the quarter under review (Q3/2011: EUR 14.0 million).
LDK merchandise was used to compensate for the at times limited
availability of Sunways solar modules. As demand weakened, the sales
volume declined to 4.9 megawatts peak (Q3/2011: 11.4 megawatts peak).
EBIT improved by EUR 3.5 million against the comparable prior year
quarter (Q3/2011: EUR -5.9 million). Three quarters of solar module
sales revenues in the third quarter of 2012 were generated abroad, in
particular in the emerging markets of South Eastern Europe. In the
prior year, the focus had still been on the established European
markets such as Italy or France. In the first nine months of the
current year, the segment's total sales revenues amounted to EUR 16.2
million (9M/2011: EUR 59.5 million). The sales volume dropped to 20.7
megawatts peak (9M/2011: 44.7 megawatts peak). Despite the marked
decline in sales revenues, the operating loss was reduced: EBIT
improved to EUR -8.1 million (9M/2011: EUR -10.5 million).

Sales revenues in the solar inverter segment declined to EUR 6.1
million in the third quarter of 2012 (Q3/2011: EUR 7.3 million). In
contrast, the sales volume of Sunways solar inverters increased to
42.1 megawatts peak (Q3/2011: 38.9 megawatts peak). However, the
segment's operating result (EBIT) dropped further to EUR -3.0 million
(Q3/2011: EUR -1.9 million) due to price declines in the market which
could not be offset on the cost side, the sell-off of individual
models as well as inventory write-downs. On a positive note,
international sales of Sunways solar inverters in the third quarter
rose by 14.3 percent against the prior year quarter. Sales markets in
Europe were expanded and access was gained to some of the emerging
solar markets in this product segment as well. In the first nine
months of 2012, sales revenues from solar inverters rose to EUR 19.0
million (9M/2011: EUR 18.4 million). The sales volume increased
markedly by 42.2 percent to 127.6 megawatts peak (9M/2011: 89.7
megawatts peak). Due to the development of market prices and
inventory write-downs, an operating loss (EBIT) of EUR 8.2 million
was incurred in the first nine months (9M/2011: EUR -4.2 million).

"We worked hard to create a broader regional base for our
distribution activities in Europe", emphasizes Michael Wilhelm,
Sunways AG's Chairman of the Management Board. "Together with LDK
Solar, we are also developing and implementing strategies for
marketing our products outside Europe in the large growth markets in
North America and China. Sunways continues to stand for high
technological competence, above-average quality as well as an
extensive portfolio of services and makes consistent use of the cost
advantages relating to production activities in China."

Prospects for the fiscal year 2012 The photovoltaics industry has had
to cope with enormous challenges for almost two years. From today's
point of view, the situation in Europe may be expected to deteriorate
even further in subsequent quarters: subsidy cuts in almost all
established markets in combination with a global oversupply of
components result in massive price and competitive pressures - not
only for European companies. An increasing number of companies has to
cope with the corresponding effects on their operating results and
liquidity

"Against this background, a 12-month payment deferral granted by the
LKD Solar Group will support the funding of Sunways", says Michael
Wilhelm. "Furthermore, another agreement relating to financial
support for our company was entered into with our majority
shareholder a few days ago", Wilhelm adds. In addition to in-kind
benefits, a shareholder loan in the amount of EUR 5.8 million was
agreed upon.

"We will not lose sight of our objective to again achieve profitable
growth - although, due to the massive deterioration of prices, this
can currently not be achieved in all product segments. Our objective
for the entire fiscal year 2012 continues to be to stabilize the
development of sales volumes and sales revenues and to reduce our
losses compared to the fiscal year 2011. The achievement of this
target is subject to risks, in particular in view of the year-end
impairment test", Michael Wilhelm adds with respect to future
prospects.

Against the background of current developments in the industry and
those expected in subsequent years, Sunways will steadily monitor the
competitiveness of its individual business segments. In addition, we
will implement measures to improve the supply chain and pursue
targeted cost management efforts.

Michael Wilhelm: "In the past months, several measures were developed
- and in some cases already initiated - together with LDK Solar to
shape and secure our company's future. The main goal is to achieve a
more efficient and productive participation in the competitive market
in the future by bundling the activities and resources of both
companies. In this context, the focus will be on our distribution
activities".

Key figures Q3/2012 Group Sales revenues: EUR 11.5 million (Q3/2011:
EUR 23.3 million) EBITDA: EUR -9.7 million (Q3/2011: EUR -10.2
million) EBIT: EUR -11.2 million (Q3/2011: EUR -11.8 million)
Consolidated net loss: EUR -8.1 million (Q3/2011: EUR -8.7 million)
Earnings per share: EUR -0.47 (Q3/2011: EUR -0.75) Sales revenues
Germany: EUR 6.0 million (Q3/2011: EUR 13.4 million) Sales revenues
rest of Europe: EUR 4.1 million (Q3/2011: EUR 9.9 million) Number of
employees (30/09/2012): 267 (30/09/2011: 343)

Solar cell segment
Sales volume: 5.9 MWp (Q3/2011: 12.0 MWp)
Sales revenues: EUR 2.9 million (Q3/2011: EUR 12.1 million)
EBIT: EUR -5.8 million (Q3/2011: EUR -4.0 million)

Solar module segment
Sales volume: 4.9 MWp (Q3/2011: 11.4 MWp)
Sales revenues: EUR 3.4 million (Q3/2011: EUR 14.0 million)
EBIT: EUR -2.4 million (Q3/2011: EUR -5.9 million)

Solar inverter segment
Sales volume: 42.1 MWp (Q3/2011: 38.9 MWp)
Sales revenues: EUR 6.1 million (Q3/2011: EUR 7.3 million)
EBIT: EUR -3.0 million (Q3/2011: EUR -1.9 million)

Key figures 9M/2012 Group Sales revenues: EUR 39.1 million (9M/2011:
EUR 84.2 million) EBITDA: EUR -19.2 million (9M/2011: EUR -16.7
million) EBIT: EUR -24.5 million (9M/2011: EUR -21.6 million)
Consolidated net loss: EUR -14.3 million (9M/2011: EUR -11.2 million)
Earnings per share: EUR -0.82 (9M/2011: EUR -0.96) Sales revenues
Germany: EUR 22.0 million (9M/2011: EUR 42.0 million) Sales revenues
rest of Europe: EUR 15.0 million (9M/2011: EUR 42.3 million)

Solar cell segment
Sales volume: 22.0 MWp (9M/2011: 45.9 MWp)
Sales revenues: EUR 12.8 million (9M/2011: EUR 46.1 million)
EBIT: EUR -8.3 million (9M/2011: EUR -6.9 million)

Solar module segment
Sales volume: 20.7 MWp (9M/2011: 44.7 MWp)
Sales revenues: EUR 16.2 million (9M/2011: EUR 59.5 million)
EBIT: EUR -8.1 million (9M/2011: EUR -10.5 million)

Solar inverter segment
Sales volume: 127.6 MWp (9M/2011: 89.7 MWp)
Sales revenues: EUR 19.1 million (9M/2011: EUR 18.4 million)
EBIT: EUR -8.2 million (9M/2011: EUR -4.2 million)

Financial calender As a consequence of the switch to the Frankfurt
Stock Exchange's General Standard trading segment, Sunways AG will
publish semi-annual financial statements as well as interim
disclosures for the first and third quarters as from the fiscal year
2013. The detailed financial calendar 2013 will be announced at a
later date.

This press release is also available on http://www.sunways.eu/en and
http://www.presseportal.de/pm/57666/sunways_ag.

Forward-looking statements This press release contains statements
relating to the future business development of Sunways AG that are
based on management assumptions and estimates made at the time of
publication. Should the assumptions underlying the prognoses fail to
be fulfilled, actual events may vary substantially from
forward-looking statements. Uncertainties include changes in the
political, legal, economic and business environment, exchange and
interest rate fluctuations as well as the behaviour of competitors
and other market participants. Sunways does not intend and is not
under any obligation to update forward-looking statements on an
ongoing basis as these are exclusively based on the circumstances
prevailing as of the date of publication.

About Sunways Sunways AG, Konstanz/Germany, stands for consistent use
of solar energy to secure long-term energy supply of man in an
efficient and sustainable manner. Sunways offers technological
competence, performance and highest quality - from single components
to complete solar systems. Since its foundation in 1993, Sunways AG
evolved into a technology leader in the photovoltaics industry
serving international markets. With silicon-based solar cells,
inverters, solar modules and solar systems, the company offers all
components required for high-yield photovoltaic power generation.
With photovoltaic solutions tailored to customers' needs (transparent
and coloured solar cells, building- integrated photovoltaic
installations), Sunways turns exceptional ideas into reality. Sunways
Production GmbH in Arnstadt/Germany is a subsidiary of Sunways AG; in
addition, the group has own branch offices in Barcelone/Spain and
Bologna/Italy. In 2011, Sunways AG with about 330 employees realised
sales of around EUR 115 million. The shares of Sunways AG are listed
at the Frankfurt Stock Exchange (SWW:GR, SWWG.DE, ISIN DE0007332207).
LDK Solar Group, one of the ten largest photovoltaics companies in
the world in terms of sales revenues, holds a majority stake in
Sunways since 2012. For further information, please visit
http://www.sunways.eu/en.

About LDK Solar LDK Solar Co., Ltd. (NYSE: LDK) is a leading
vertically integrated manufacturer of photovoltaic products. LDK
Solar manufactures e.g. polysilicon, mono and multicrystalline
wafers, solar cells, and solar modules. LDK Solar's headquarters and
principal manufacturing facilities are located in Hi-Tech Industrial
Park, Xinyu City, Jiangxi Province in the People's Republic of China.
For more information about LDK Solar and its products, please visit
http://www.ldksolar.com.

Further inquiry note:
Dr. Harald F. Schäfer
Leiter Unternehmenskommunikation und Investor Relations
Tel.: +49 (0)7531 996 77-415
E-Mail: communications@sunways.de

end of announcement euro adhoc
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company: Sunways AG
Macairestr. 3 - 5
D-78467 Konstanz
phone: +49 (0)7531 99677 0
FAX: +49 (0)7531 99677 10
mail: info@sunways.de
WWW: http://www.sunways.eu/de
sector: Alternative energy
ISIN: DE0007332207
indexes: CDAX, Technology All Share, General All Share
stockmarkets: free trade: Berlin, München, Hamburg, Düsseldorf, Stuttgart,
regulated dealing/general standard: Frankfurt
language: English