BayWa reports lower sales in the first half of 2024

These results build on similarly poor performances in the first quarter of the year, in which the value of the company’s assets reached 417.6 million euros ($464.2 million), an increase of 3.3% compared to the fourth quarter of 2023 , but around 500 million euros (US$555.8 million) lower than in the first quarter of 2023.

Specifically, BayWa concluded that it had to reduce the value of its renewable power generation assets by €171.5 million, with its independent power producer (IPP) business losing €114.4 million in value due to changing “valuation assumptions” due to macroeconomic fluctuations, such as the price of electricity and higher financing costs.

Variable performance, variable asset

While BayWa expects this trend to reverse in the coming months – it has appointed a chief restructuring officer, commissioned an internal restrictions report and expects higher sales in its solar, wind and battery storage businesses in the fourth quarter of 2024 -, There is uncertainty about this, particularly in the solar sector. The question of how high the value of renewable electricity generation systems is is a growing problem.

Experts from renewable energy analyst kWh Analytics wrote for an issue of PV Tech Power This year, he said the solar industry would benefit from more accurate value modeling and forecasting practices, particularly to prevent such fluctuations in valuation that can increase the perceived risk of investing in a solar system.

Given the changed own valuation of the assets, BayWa points out that it is currently not in a position to provide a forecast for the financial figures for the full year. The news is a result of increasing uncertainty about BayWa’s financial performance in general. The company reported debts of over 5 billion euros ($5.6 billion) in June this year and was able to raise around 550 million euros ($611.4 million) in new debt financing. Repayments from several banks were made in August suspended until September.

The news follows similarly discouraging results from European peer Meyer Burger, which yesterday delayed the publication of its half-year results and had already announced both job cuts and a leadership change as part of a “strategic realignment”.