May 9, 2008

Hamburg, Germany: Conergy Reports 53% Increase in Sales in First Quarter

Hamburg based Conergy AG, says the company has regained momentum in the first quarter of 2008 and increased sales by 53% to EUR 203 million, compared to the same quarter last year.

Simultaneously Conergy’s management has achieved significant interim targets in the restructuring program implemented from November 2007 onwards.

The gross margin improved to 17% in the first quarter - a clear increase compared to 13% in the first quarter of 2007. This is primarily due to the increased use of Conergy’s own products in so-called complete systems.

In total, Conergy has doubled its gross profit to EUR 34 million compared to the previous year. Results were burdened by non-recurring costs for the strategic repositioning, project delays and further ramp-up costs for the new plant in Frankfurt (Oder). This led to a higher EBITDA loss of EUR 21 million, compared to the same period last year (2007: loss of EUR 18 million).

Significantly higher financing costs are reflected in a net loss of EUR 43 million for the first quarter (2007: loss of EUR 15 million) As expected, the Group has taken up a large part of the available credit lines.

“Five months after the start of the strategic repositioning, our efforts to stabilise the company are showing results. The current development is a sign that we are moving in the right direction”, says CEO Dieter Ammer. “Excluding the cost of restructuring and other non-recurring costs, operating costs have risen by a significantly smaller percentage than sales. This shows that the medicine is starting to work. We have adjusted the portfolio and aligned the management according to clear financial targets. In spite of this fundamental restructuring, we have not neglected our customers or the market. We are making the most of available market opportunities”, Ammer adds.

Sales in the Photovoltaics division increased by 65% to EUR 155 million, due to large-scale projects in Spain as well as strong demand in the USA. EPURON’s sales increased by 20% to EUR 48 million.

The delayed signing of a large-scale project in Spain prevented stronger sales growth at EPURON in the first quarter. This large-scale project will probably be completed and the associated revenue booked during the second quarter.

Business outside Germany has continued to develop very positively for the Conergy Group, with an increase in revenues of 40% to EUR 94 million.

Further details about: Conergy AG