Spanish installer SolarProfit to cut staff by 90% to avoid collapse

Spanish solar panel installer SolarProfit (BME:SPH) plans to lay off 90% of its workforce amid a dire financial situation it faces due to a slowdown in demand and falling energy prices.

The company said in a stock exchange filing on Thursday it had accumulated significant losses for 2023, with EBITDA in the red by EUR 33 million (USD 35.2m). Its consolidated equity is negative and liquidity strained, and provisional accounting figures for the first quarter of 2024 are unlikely to show improvement, the filing said.

SolarProfit further said the plan it presented in September 2023 to increase revenues and reduce costs failed to produce desired results as the market situation continued to deteriorate. The residential demand for solar installations, “far from improving, has worsened” since then, the company said. Likewise, demand by the industrial sector dropped due to falling energy prices. SolarProfit’s situation has been further exacerbated by dense competition in the solar installation market.

Demand for solar by homes and businesses in Spain dipped in 2023 for the first time due to the gradual withdrawal of European subsidies, interest rate hikes and moderation of power prices, according to Spanish association of renewable energy companies APPA.

The Spanish solar self-consumption companies installed 1,943 MW of systems in 2023, compared to 2,649 MW in 2022 when EU NextGeneration funds were more available and power prices spiralled due to the war in Ukraine, APPA said in its annual report on the sector.

SolarProfit does not expect current circumstances to improve, and as a result, it has decided to abandon its KPI forecasts for the end of 2024. It said that it plans to start a redundancy plan as soon as possible and outsource installations to third parties. Additionally, it has begun negotiations with creditors to reach a restructuring plan.

(EUR 1.0 = USD 1.066)

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