Soltec restates its 2023 accounts with a €192 million difference from the revenue published in February, due to a difference in the timing criteria used for revenue recognition

• Due to a difference of opinion with its auditor, the company will not record a total of €192 million in revenue from solar tracker supply in 2023
• This is a difference in the timing criteria for revenue recognition, as the revenue not recognized in 2023 will be recognized in 2024
• The bill and hold sales procedure is a common practice in the industry

Soltec has today filed its annual accounts for the fiscal year ended December 31, 2023, which differ from the annual results reported to the market on February 28, 2024.

The company has been compelled, due to a disagreement with its auditor, Ernst & Young, regarding the timing criteria for revenue recognition, to stop recording a total of €192 million in revenue from solar tracker supply in 2023, along with the corresponding costs amounting to €144 million.

The revenue and costs associated with these operations are expected to be recognized in the accounts during fiscal year 2024.

The company published its 2023 results on February 28 (following approval by the board of directors, after a favorable report from the audit committee), including the aforementioned revenue and expenses. At that time, the auditor informed the board and the audit committee that, although the audit process had not been completed, those results would not involve material changes.

Subsequently, EY expressed its disagreement regarding the accounting recognition in fiscal year 2023 of revenue related to 36 solar tracker supply contracts carried out by the company under the Bill and Hold arrangement. These contracts amount to €192 million, which the company is not recording in the accounts filed today, but which were included in the results reported in February.

Bill and Hold

The Bill and Hold procedure is a common practice in the industrial sector, requiring that the goods be manufactured by the supplying company and that control of the goods be transferred to the customer prior to physical delivery. It is a complex process with specific accounting requirements.
Soltec included revenue from Bill and Hold sales transactions in its annual accounts for fiscal years 2022, 2021 and 2020, with favorable reports from both EY (in 2022) and Deloitte (in 2021 and 2020).

Timing criteria, the reason for the difference in positions

The difference in positions relates solely to the timing criteria for recognizing this revenue, and therefore only determines whether it is allocated to one fiscal year or another. Revenue associated with the 36 transactions mentioned is expected to be recognized in the accounts during fiscal year 2024.

2023 Annual Accounts

Although the company does not share the auditor’s criteria, it has chosen to accept the requested adjustments, as it understands this to be the most beneficial option for safeguarding the interests of the company and its stakeholders.

As for the annual accounts filed for fiscal year 2023 and the second-half 2023 semi-annual financial report submitted to the CNMV, they show consolidated revenue of €395 million, adjusted consolidated EBITDA of €10.4 million, and net income of -€23.4 million.

In the fourth quarter of the year, revenue amounted to €90.6 million, with adjusted EBITDA of €9.8 million.

In the industrial division, revenue for the year amounted to €376.8 million, with adjusted EBITDA of €2.3 million, representing an EBITDA margin of 0.6% for full-year 2023.

Separately, during the first three months of 2024, Soltec signed contracts worth €101.9 million, equivalent to 1,126 MW.