Manz terminates negotiations with Chinese partner
Manz says it is terminating negotiations with its Chinese customer Chongqing Shenhua Thin Film Solar Technology Co., Ltd. regarding the conclusion of the large-scale solar project CIGSfab.
Due to this decision, Manz is making a non-cash impairment in the amount of EUR 23.2 million on a contractual asset. The decision was reached by the managing board after no agreement could be reached on the completion of the project.
Since 2017, Manz had been working on a major project for the Chinese partner with a planned total order volume of around EUR 218 million, which was interrupted in December 2020 at the customer's request, Manz explains in a press release. By the end of 2020, Manz AG had received payments of around EUR 175 million, but had already provided services with a total value of around EUR 198 million to date. Manz says that it assumed that the customer would fulfill the associated contractually outstanding payments.
"Contrary to expectations, however, it has not been possible to reach a mutual solution between the contractual parties to date. Therefore, Manz AG is now pursuing the goal of asserting its claims through the courts," the company writes.
"We very much regret that we were unable to reach an amicable solution with our Chinese contractual partner. We will now consistently focus our efforts on the implementation of our growth strategy in the automotive & electromobility, battery manufacturing, electronics, energy, and medical technology industries. Accordingly, we are not undertaking any further technological developments in CIGS thin-film solar technology and have discontinued market development. In the e-mobility market in particular, we have established a strong position as a high-tech equipment manufacturer to benefit from the immense market potential," says Martin Drasch, CEO of Manz in the press release.
Due to the impact on earnings development resulting from this decision and against the backdrop of the unexpectedly strong increase in raw material and energy costs, a changed project mix, ongoing challenges in the global supply chains, and increased economic uncertainties among Manz customers, the company is adjusting its forecast for the 2022 fiscal year.