The board of troubled German inverter manufacturer SMA this morning (Friday) revealed it anticipates sales of 730-770 million ($828-873 million) this year.
Having announced on Tuesday plans to shed a third of its workforce 1,600 jobs, 1,300 of them in Germany by the end of June, SMA today predicted a 2015 earnings before interest and taxes (EBIT) figure of 30-60 million ($34-68 million).
The Niestetal-based inverter maker, still the world’s largest by market share, had said it would reveal plans of a company restructure today but an announcement on the investor news section of the company website was light on details.
SMA’s board announced plans to cut costs by 160 million ($181 million), reducing its break-even point to less than 700 million ($794 million), by focusing ‘on strategically important development projects’, a ‘reducing of the depth of added value’ what sounds like corporate speak for cutting corners and, in a nod to this week’s grim jobs announcement a ‘consolidation of global infrastructure.’
The job cuts, a significant rise from the announcement by the company in July that 600 staff would be laid off by the end of 2015, are intended to ensure no further redundancies will be required going forward.
Diversity is key for SMA
Analysts IHS this week said the company’s chief hope lay in plans to diversify into the smart home and energy management market where, senior PV market analyst Cormac Gilligan told pv magazine, the German manufacturer would be ‘better placed.’
The dominance of domestic companies and intense price pressures have seen SMA fail to replicate the market share it has claimed elsewhere.
IHS predicts the global inverter market will grow 1 per cent this year, to $6.4 billion, with shipments rising 12 per cent to 46.5 GW, in an indication of worldwide price pressures driven by the rise of Asian manufacturers which will drive a price fall of around 10 per cent, according to the market research company.
The picture in the Chinese, Japanese and U.S. markets is in stark contrast to the German market SMA has so long dominated.
IHS predicts 2015 will see a $300 million German inverter market, down from $1.6 billion in 2012 and even the demise of competitors such as Swiss company SolarMax in November offers little respite for SMA as Asian competitors move into the dwindling European market.
This morning’s corporate announcement by SMA indicated the company had a net cash balance of almost 230 million at the end of 2014 and the hope is that the global cuts being made will kick into gear before that balance dips into the red.