Todae Solar placed in administration after 80% sales drop
One of the nation’s top 3 solar contractors has fallen into administration following an 80 per cent drop in sales.
One of Australia’s top solar contractors has collapsed into voluntary administration after its sales plummeted by 80 per cent in March and April due to the COVID-19 pandemic and its main financier cut credit lines as the economy nosedived.
Todae Solar, which has completed contracts with Parliament House in Canberra, Westfield, Telstra and Coles, is among the three biggest solar contracting companies within the commercial and industrial sector after building up the business since it started operating in 2003.
However, a rapid fall in orders, along with tight margins and the withdrawal of a structured finance facility saw AS Advisory appointed as voluntary administrators on Thursday.
“There has been a big slowdown in the market in the last few months and a funding facility due to Covid was withdrawn,” Todae Solar founder and chief executive Danin Kahn told The Australian.
“When Covid happened, the market quickly started dropping and there was a change in strategic position from our financier among many accounts they had so they could reduce their risk and exposure.”
A significant volume of its national customers either cancelled planned projects while some existing clients delayed committed spending due to financial pressures.
“In the March and April period our sales dropped by 80 per cent from what we were expecting them to be,” Mr Kahn said.
Solar contractors have faced a difficult few years in Australia’s booming renewables market with several high profile players exiting the industry. RCR Tomlinson collapsed in 2019 after major cost blowouts.
Todae Solar, which has also secured contracts with the federal Department of Defence and WA’s Department of Mines & Petroleum, said margins had been extremely tight among its corporate clients in recent years for jobs such as rooftop solar.
“It’s definitely got more competitive. Customers have been fairly aggressive and have been driving pricing down and new entrants have also been pushing for their own market share,” Mr Kahn said.
Singapore solar developed Sunseap owns a minority stake in Todae Solar. Mr Kahn said there has been strong interest from parties in its business since voluntary administration was announced on Thursday and he was hopeful a resolution could be found given its strong track record.
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