German inverter company SMA has issued relatively positive financial results for the third quarter (Q3) of the year, but has warned that annual sales are likely to come in at the lower end of the guidance range due to an unspecified supply shortage of critical components.
Equally, while sales in Asian markets increased by 43%, SMA saw its overall sales decrease to €592.5 million between Q1 – Q3 2017, down from €708.8 million for the same period last year. The chief reason for this contraction is continued weak performance in the large-scale solar sector of North America.
Gross sales in the Americas have decreased by around 55% to 154.2 million year-on-year over the period of Q1 – Q3. SMA states that last year’s performance in North America was bolstered by a rush of activity in advance of the expected ITC expiration. In contrast, activity in 2017 has been muted under the cloud of proposed trade barriers being introduced in the wake of the Section 201 petition.
Globally, inverter sales of 5.9 GW for the first three quarters of the year was, however, slightly higher than the corresponding period in 2016 (5.7 GW), while in Q3 alone this year SMA saw its gross margin increase to 25% following a doubling of EBITDA earnings to €26 million. Net income of €25 million between Q1 – Q3 was down against the same period last year, where income reached €36.9 million.
Operating cash flow for the German firm remained high at €78.7 million over the first three quarters, with net cash standing at €435.8 million as of September 30.
Company CEO Pierre-Pascal Urbon remarked that the fiscal year has thus far gone better than expected for SMA, with particular praise reserved for its international presence and success of new SMA products. “We have increased the product-related order backlog by 25% to €350 million since the end of the first half of 2017,” Urbon said. “We expect strong end-of-year business and are confident about achieving our objectives for the year.”
Urbon warned, though, that annual sales would be more than €900 million, down from the previous forecast of €900 million to €950 million.