Escape to America: Meyer Burger shares crash after weak numbers

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The solar industry is in a transition period. Swiss company Meyer Burger also sees its future abroad, as China and the US pump huge subsidies into the industry. In order for the plan to work, the planned capital increase must first be enacted.

Looking at the surprisingly dark red balance sheet for 2023, it becomes clear how dramatic the situation at Meyer Burger actually is: a very high loss of 291.9 million francs as a result (previous year: -69.9 million).

Shares fell almost 8 percent

Also, the company is burning a lot of cash: liquid assets reached 82 million at the end of February and were still at 150 million at the end of 2023. Therefore, reducing costs is more than urgent.

Meyer Burger shares fell on the stock market. At around 13.30, shares were “only” in single digits (-7.8 percent).

No wonder management is moving forward with closing the location in Freiberg in the eastern German state of Saxony. This should provide some relief. After some back and forth, production there came to a halt.

Price reduction from Chinese manufacturers

This is bad news for the workforce. Probably 500 people will lose their jobs. Calls for help from German politicians have so far gone unheard.

And this is despite the fact that German solar manufacturers are under great pressure from competition from China. The Chinese are currently pouring dumping prices into the market. However, solar companies operating in Germany have recently criticized that the majority of modules coming from China are produced using forced labor.

In addition, the Chinese state supports production here with huge subsidies. However, the German federal government has not yet succeeded in promoting domestically produced solar products.

Europe underestimates the importance of solar industry

“Unfortunately, ours is the only continent that has not yet understood the strategic importance of solar energy,” Meyer Burger managing director Gunter Erfurt said in an interview with the AWP news agency on Thursday. However, Erfurt announced its closure decision, saying that it could not work with the “principle of hope” as a strategy.

The manager now wants to seek his luck with his company in the USA. There you will encounter a completely different situation. “The country has realized the importance of this technology for the coming decades and is doing what it needs to do,” says the executive. Under the Inflation Reduction Law, domestic industry will be greatly supported and relocated.

Will there be a comeback in North America starting in 2026?

Meyer Burger started investing in the USA a few years ago. Production at the new facility in Goodyear, Arizona is planned to begin in the second quarter of 2024. Increased cell production in Colorado Springs is expected to begin in late 2024. Erfurt told AWP that a positive cash flow from the North American business could be possible as early as 2026.

To survive the current dry period, the company first needs new funds. As is known, this is expected to lead to a capital increase of 200 to 250 million francs. As announced, Desri, by far Meyer Burger’s largest U.S. customer, will also be featured. (AWP)

Source :Blick