SMA’s yearly financials show record sales output, but a drop in revenues

It’s a sign of the price-declining times when a company can post record sales figures, but still report a drop in revenues. Fortunately for SMA Solar Technology, the German company was able to translate its increase in sales into a significant increase in EBIT of almost 20%.

Getting onto the broken record, 2016 saw SMA make solar inverter sales of more than 8 GW, which is up from 7.3 GW in 2015. As noted, the rapid decline in inverter prices throughout the year saw the company post a drop in revenues, from €981.8 million in 2015 to €940 million in 2016. However, it is likely that this figure will keep the company on the top of the global inverter manufacturers’ list for revenues, as other company’s prices will have also fallen.

The good news for SMA is that despite the fall in prices, it has still been able to increase its yearly EBIT almost 20%, from €43.3 million in 2015 to €65 million. “In 2016, SMA continued successfully on the path to more profit and higher cash flow,” commented SMA CEO Pierre-Pascal Urbon.

Looking forward, the company believes that some new products, which it is presenting at the Capital Markets Day tomorrow, will lead to an increase in the company’s profitability and a boost in competitiveness.

“Future energy generation will be decentralized, renewable and digital,” continued Urbon. “This will provide attractive opportunities for specialists in environmental and communication technology. SMA will use digital energy management to create transparency of energy flows across various sectors, such as PV, heating and e-mobility, and to optimize total energy costs at the local level. With its future service range, SMA will make PV an integral component of the new energy market.”

Focusing on the immediate future, SMA is expected a drop in revenue to between €830-€900 million in 2017, as well as a decline in EBITDA to between €70-€90 million, mainly as a result of continued price pressure in the segment.

“The fiscal year 2017 will certainly not be easy for SMA,” added Urbon. “We have already demonstrated on several occasions in the past that we can counter the enormous price pressure in our industry with technical innovation and the systematic reduction of fixed costs.”