Following on from an announcement in September, which saw the German inverter manufacturer lower its FY 2018 forecasts, SMA today announced that while sales of its products have increased – from 5.9 GW between Q1 and Q3 2017 to 6.2 GW – its financials have taken a hit, primarily due to the Chinese May 31 policy changes, which have resulted in “massive” price pressure across the global PV industry.
Indeed, sales for the period decreased by 2.9% to €575.1 million, compared to €592.5 million, while EBITDA fell to €50.5 million, down from €55.3 million. Gross margin was up from 21.1% to 23.1%, however.
Its order backlog, meanwhile, decreased from €746.3 million to €549.3 million as of September 30, 2018, of which €163.2 million comprises its product business and €386.1 million its service business (to be implemented over the next five to 10 years). The main reason for the decline, says SMA is due to the postponement of utility-scale projects until next year by developers, who are waiting for further price decreases.
This left SMA with an overall net income of €8.5 million, significantly down from €25 million in the first nine months of last year.
Accounting for the lion’s share of sales was the company’s utility segment, which grew from 32% in 2017 to 35.8% this year, followed by the commercial and residential segments, which accounted for 33.4% (2017: 31.7%) and 22.8% (2017: 28.7%) respectively. The storage business grew slightly, from 7.6% to 8%.
Overall, the company re-confirmed its revised forecast for the full year, which anticipates sales of €800 million to €850 million, instead of €900 million to €1 billion, and a break-even, or slightly negative, EBITDA, down from an earlier projected €90 million to €100 million.
In addition to revising its forecast in September, SMA also announced structural changes. These changes, expected to be adopted by the end of the year, are set to include “reduction of complexity in the areas of operations and technology, the outsourcing of activities and the global adjustment of administrative areas,” said now resigned CEO, Pierre-Pascal Urbon at the time.
No new specific details were shared by the company today. “By the end of this year, the restructuring measures will be agreed upon and adopted with the employee representatives. In addition, we will introduce more new developments into the markets along with our existing cost-optimized products to counter the increasing price pressure in the component business,” it said in its statement.
“It is our long-term goal to tap into the higher-margin system and service business on the basis of our comprehensive experience and competence in energy management and the integration of battery storage,” it added.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: email@example.com.