SMA braces for hefty drop in revenue

German inverter manufacturer SMA Solar Technology AG said Thursday that it expected second quarter revenue to drop from €429 million ($567 million) a year ago to between €240 million and €280 million ($317 million and 370 million).

In the first three months of the year, SMA posted a 47.6% drop in sales to €212.3 million as the company struggled with subsidy cuts in major markets, the still unresolved debt crisis and the possibility of punitive duties on Chinese modules in Europe. The company suffered a net loss of €5.8 million, compared with a €29.6 million profit in the first quarter of 2012.

SMA has continued to navigate turbulent waters from April through June and the trend in the second half of the year is likely worsen, SMA’s management told an investors’ at a meeting in Munich on Thursday.

The company had previously forecast annual revenue this year of between €900,000 and €1.3 billion, compared to €1.5 billion in 2012. While SMA expects a balanced operating result, it has not ruled out a loss for the year.

SMA has been hit hard by weak demand and plunging prices in the solar industry as well as sharp cuts in subsidy and incentive programs that have drastically limited investment in new solar facilities.

SMA chief executive Pierre-Pascal Urbon said in May that the global photovoltaic market would decline in 2013 for the first time in many years. "As the global market leader, we will be especially affected by this."