SMA posts strong Q1 figures across all core segments

Germany’s SMA Solar Technology AG, a leading supplier of PV inverters, has reported strong and stable first quarter (Q1) financials for 2016, increasing revenue, sales, net cash and global share of the market.

In the first three months of the year the company achieved sales of €253.8 million ($290 million), up from €226.3 million ($258 million) in Q1 2015 – a growth of 12.2% year-over-year. This exceeded the managing board’s forecast of sales between €235-240 million, and meant that operating earnings (EBIT) were once again positive at €25.2 million following last year’s negative €-5.4 million EBIT for Q1.

Across the board, all core segments were profitable, with SMA’s commercial ventures proving fruitful – sales growth topped 50% year-over-year in the sector, while both residential and large-scale markets were stable and profitable, the company said.

Shipments of SMA inverters rose 21.3% year-over-year to 2.1 GW (up from 1.7 GW in Q1 2015); a growth reflected in the company’s increasing global reach – its international share of the PV inverter market increased to 92.4% in Q1 2016, up from 88% a year prior.

A fixed cost reduction across many SMA products, allied to increased sales volumes, drove the EBITDA margin 16.6% for the quarter, reaching €42.1 million – up from €13.4 million in Q1 2015. The firm’s consolidated earnings stood at €18.8 million by March 31, 2016, equivalent to €0.54 per share (in Q1 2015 share earnings were €-0.23).

The welcome result of this steady profit-making was considerably improved gross cash flow, with SMA reported net cash at the end of the quarter of €323.4 million, up from €285.6 million at the end of Q4 2015. SMA’s equity ratio now stands at 49.9%, which suggests a comfortable equity capital base and solid balance sheet for the firm.

At the end of April, SMA agreed a revolving credit facility of €100 million with a consortium of German banks (including Deutsche Bank), which gives the company financial leeway to expand its O&M activities as it looks to bolster and diversify its sales and revenue channels.

SMA CEO Pierre-Pascal Urbon said that the Q1 results were further proof of the company’s successful path towards sustainable profitability. "We have a balanced distribution of sales over all segments and regions, and have generated positive earning in all segments of the core business," Urbon said.

The CEO also remarked that SMA’s recent partnership with power optimizer specialist Tigo Energy will give the company greater access to the growing smart module market – "a market that was previously closed to us", Urbon said. The company hopes that this strategic step will support its growth efforts in various residential and commercial PV markets globally.

Looking ahead, SMA expects sales of between €950 million and €1,050 million for the fiscal year, supported by a €691.6 million order backlog reported at the end of Q1 2016.