SMA raises sales forecasts again, Americas inverter sales to increase >35% in 2016

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A better than expected performance in Q3 2015, and a high order backlog totaling €652 million (€313 million of which comprises products) has led SMA to raise its full year earnings forecasts for the second time this year.

It now expects sales to reach between €925 million to €975 million, up from €850 million to €900 million; and to achieve an EBIT of €10 million to €30 million as opposed to €0 million to €10 million. EBITDA, meanwhile, is set to reach between €80 million and €100 million.

Q3 sales totaled €269.9 million, an improvement on the €208.1 million reaped in the previous year. This brought sales for the first nine months of 2015 to €699.2 million, a 27% increase on 2014. Of this, international sales accounted for 86.7%, with the best performing markets comprising North America, Japan, the U.K. and Australia.

The utility PV power plant segment was said to be the primary sales driver, although the residential and commercial PV system segments also performed strongly. Solar PV inverter sales were roaring, with 5 GW sold between Q1 and Q3 – almost as much as was sold in the full year 2014 – and up from 3.3 GW in the first three quarters of last year.

In 2016, SMA predicts inverter sales in the Americas will increase by more than 35%, to reach €1.5 billion. "The utility segment remains the key growth driver in revenue terms," it writes the in a statement released.

Although it has been a strong market for the German solar company, sales in Japan are expected to decline next year by more than 25%, due to the market’s FIT cuts. "India and South East Asia are expected to grow slightly in revenue terms. This trend is mainly driven by commercial and utility-systems," it added. At the start of this October, SMA announced inverter sales had surpassed 1 GW, thus making it the first non-Japanese supplier to reach this milestone.

Overall, Reuters reports that SMA CEO, Pierre-Pascal Urbon, expects average selling prices for inverters to fall between 8 and 10% in 2016.

EBITDA and EBIT recorded significant improvements in the first nine months of 2015, at €58.9 million and €3.4 million, respectively, up from €8.2 million and a loss of €72.7 million. Gross margin also grew, from 17 to 19%. At €-13.7 million net loss improved from the €54.1 million loss seen in the previous year.

While the financials are positive, they have come at a cost: Since SMA’s restructuring announcement at the end of this January, 1,250 full time employees have left the company. Another around 200 will leave by the end of the year. By this time, it expects to realize cost savings of €160 million, €100 million of which have already been made.

In October 2012, SMA announced over 1,000 jobs would go, comprising 450 full timers and 600 temporary workers. And again in July 2013, it said 700 jobs in Germany would have to go by the end of 2014.