European solar cell and module maker Meyer Burger Technology AG has landed itself a plum order for a long term 3.75 GW module supply with US based DE Shaw Renewable Investments (DESRI) as it reported over 200% annual improvement in consolidated net sales for H1/2022.
Under a binding agreement signed, between 2024 and 2029 Meyer Burger will deliver 3.75 GW of solar modules for DESRI's large scale projects in the US. The products will be manufactured at Meyer Burger's Goodyear, Arizona fab announced in January 2022 with 400 MW heterojunction solar cell and module capacity (see Meyer Burger Zeroes In On Arizona, US).
DESRI also gets the 1st right of refusal to increase the quantity to 5 GW. Nonetheless, this deal brings Meyer Burger funds to procure and finance materials for production. Interestingly, the modules will be used by DESRI for utility scale solar plants.
Meyer Burger says now it needs to expand production capacities ahead of schedule, expanding the Goodyear capacity to 1 GW annually for utility modules and an additional 500 MW for the US rooftop segment. Full capacity at the Arizona fab is expected to be fully utilized on an accelerated schedule, enabling an optimal production cost structure.
"The company plans to further expand its capacities in the immediately foreseeable future by adding new equipment to reach a nominal capacity of approximately 3 GW by mid-2024," explained Meyer Burger. "The expansion of the additional solar cell production capacity of 1.5 GW required for approximately 3 GW overall capacity is planned at the Thalheim site (city of Bitterfeld-Wolfen, Germany)."
This strategy is an expansion of its previously declared plan to take a pause after reaching 1.4 GW annual capacity for cells and modules (see Meyer Burger Raises Capital To Expand Production Capacity). Along with the need to meet DESRI order and longer lead times for equipment, growing working capital requirements with increasing production capacity and increased raw materials costs, as well as higher ramp-up costs caused by the slower than originally expected ramp-up of the current capacity, the German manufacturer plans a potential capital increase of some CHF 250 million.
H1/2022 financial results
Meyer Burger's H1/2022 financial results show its consolidated net sales increased from CHF 18 million last year to CHF 56.7 million. Increased sales volume reflects the ramp-up of production of module sales, it added. "With these results, Meyer Burger has proven its ability to sell at premium prices and also to pass on recent materials cost increases to its customers," shared the management.
Nonetheless, its EBITDA was still in the negative with CHF -24.4 million but narrowed down from CHF -30.9 million in H1/2021, and EBIT of CHF -32.7 million, down from CHF -34.1 million. At the end of June 2022, its total assets amounted to CHF 510.7 million, up from CHF 492.7 million a year back.
A few weeks back, Meyer Burger brought down its volume targets for this year citing global supply chain constraints (see Meyer Burger Lowers Annual Production Forecast).