Conergy Rises in Frankfurt on Success of Cost-Cutting Measures

By Nicholas Comfort

Aug. 8 (Bloomberg) -- Conergy AG, Germany's second-largest solar company, rose to the highest in almost three weeks in Frankfurt trading after reporting success from a restructuring program.

Conergy gained as much as 93 cents, or 10 percent, to 10.10 euros in Xetra electronic trading, which would be the highest close since July 21. The stock traded at 10.06 euros as of 9:20 a.m. central European time.

The company reported second-quarter earnings before interest, tax, depreciation and amortization of 1.8 million euros ($2.74 million), its first profit since the start of a cost-reduction program. Conergy is ``making good progress'' with a plan to cut jobs and should be able to fund severance packages and consultant fees this year, Chief Executive Officer Dieter Ammer said today.

``It's the first time we're profitable on an operative level since we began the program, and we're proud of that,'' Ammer said by telephone.

Conergy began cutting jobs and closing half its plants after finding itself in a ``liquidity bottleneck'' last November.

The company's net loss for the period widened to 23.9 million euros, or 66 cents a share, from 18.7 million euros, or 55 cents, a year earlier, Conergy said today in a statement on its Web site. Sales more than doubled to 379.1 million euros.

The ``net income figures were weighed down by financing, positive factors last year and one-time effects,'' the CEO said.

Restructuring costs rose to 11 million euros in the second quarter from 8 million euros in the first, according to the statement. Those costs comprised 8 million euros in consultants' fees and 3 million euros lost on writedowns following plant closures, the company said.

Conergy has fired about 800 people, including those from discontinued operations, which will save the company 40 million euros a year from 2009, Ammer said.

The chief executive said today that Conergy expects to report a loss in the ``significant double digits'' of millions of euros in full-year earnings before tax.

Germany's largest solar company is Q-Cells AG.

To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net