SMA sees revenue drop nearly 50% in Q1

The group is planning major job cuts in order to offset revenue loss and the lower level of sales in the coming months.

While SMA posted a net loss of €5.8 million (compared with a €29.6 million profit in Q1 2012), it generated earnings before interest, taxes, depreciation, and amortization (EBITDA) of €9.4 million. Investment in infrastructure resulted in an increase in total depreciation and amortization to €17.8 million, compared to €14.5 million a year ago.

The company said sales were within its own guidance of €190 million to €220 million.

SMA sold 1.2 GW in PV inverters in the first quarter, down from 1.9 GW in Q1 2012.

While the group faced a tough market in Europe, where subsidy cuts in major markets dampened business, it saw its export ratio increase from 61.2% to 67.5% of sales, with growth seen in the U.S., Australia and Thailand.

"This underscores SMA’s outstanding international position with its excellent sales and service structures and full range of products," the company said.

However, overall business was further hit by the still unresolved debt crisis and the possibility of punitive duties on Chinese modules in Europe, which had a negative effect on demand for PV inverters.

Highlighting an equity ratio of 59.1% and net liquidity of €375.5 million, SMA said its balance sheet structure remained "very solid," adding that it could finance further development from its own resources.

Looking forward, SMA CEO Pierre-Pascal Urbon said, "Measured in euro, the global photovoltaic market will decline in 2013 for the first time in many years. As the global market leader, we will be especially affected by this."

Urbon added that the group would not be able to offset the sharp decline in sales with ongoing measures to increase productivity and save on material costs alone and that it was "forced to adjust the personnel structures to the changes in underlying conditions and the lower level of sales in the upcoming months."

The chief executive said SMA would enter into negotiations with the group’s work council and strive for a socially acceptable solution in the next few weeks.

Urbon, who has indicated that SMA would reposition itself as an energy management company, added, "As part of our innovation strategy, we will develop entirely new product platforms and use our many years of experience in system technology in order to design innovative solutions for energy management."