The differences between Soltec and its auditor Ernst & Young have led the company specialized in photovoltaic energy to modify its annual accounts for 2023, in relation to the results published in the market last February. Specifically, the discrepancy revolved around the temporal criterion for recognizing income from the supply of solar trackers, which amounted to a total of 192 million euros, along with corresponding costs of 144 million, as reported by the company to the National Securities Market Commission. . (CNMV).
The solar panel manufacturer published its results for the 2023 financial year on February 28 – after approval by the board of directors, following a favorable report from the audit committee -, including the aforementioned income and expenses. In a statement, the company indicates that the auditor informed the board and the audit committee at that time that said results, even without having completed the audit process, would not have material changes.
Subsequently, Soltec added that EY expressed its disagreement with the accounting recognition in fiscal year 2023 of income related to 36 supply contracts for solar trackers carried out by the company under the ‘bill and hold’ modality. These contracts amount to 192 million euros, which the company does not record in the accounts prepared this Monday, but were recognized in the results reported in February. However, the firm indicates that income that has not been recognized in 2023 will be recognized for accounting purposes in 2024.
Complies despite not sharing the auditor’s criteria
Soltec assures that, although it does not share the auditor’s criteria, it has chosen to accept the requested adjustments, since it understands that this “is the most beneficial option to save the interest of the company and its interest groups.” The ‘bill and hold’ procedure is a common practice in the industrial sector, which requires that the material be manufactured by the supplying company and that control of the merchandise be transferred to the customer prior to its physical delivery. This is a complex process with specific accounting requirements.
Soltec included income from ‘bill and hold’ sales operations in its annual accounts for the years 2022, 2021 and 2020, with favorable reports from both EY, in 2022, and Deloitte, in 2021 and 2020. The firm emphasizes that this difference in positions refers “only to the temporal criterion for recognizing this income, which is why it only determines the possibility of imputing it in one year or another.” Thus, it expects that the income associated with the 36 aforementioned operations will be recognized in accounting throughout the year 2024.
From 11 million in profits to 23 million in losses
Regarding the annual accounts prepared for the financial year 2023 and the semi-annual financial report for the second half of 2023 sent to the CNMV, they recognize 395 million of consolidated income, an adjusted gross operating result (Ebitda) of 10.4 million euros at consolidated level and net losses of 23.4 million euros, compared to the 11.7 million euros of profits that it had reported at the end of February. On the other hand, during the first three months of 2024, Soltec has signed contracts worth 101.9 million euros, which is equivalent to 1,126 megawatts (MW).
