Price pressure and delivery bottlenecks lead SMA to significant loss in 2018

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From pv magazine Germany.

SMA Solar Technology AG sold inverters with a total capacity of around 8.5 GW in the last financial year – a similar level to the amount shipped in the previous 12-month period – according to provisional results.

However sales and profits, though within the scope of twice-revised recent guidance, were significantly down. Price pressures saw turnover fall year-on-year from €891 million to €761 million. EBITDA losses are expected to be around €67 million, compared to positive figure of €100 million for 2017.

SMA said the result was burdened by one-off effects and the expenses incurred by a cost-cutting restructuring process.

Depreciation in 2018 was estimated at more than €80 million as the company posted an EBIT loss of €150 million.

“SMA had to contend with considerable difficulties during the last fiscal year,” said CEO Jürgen Reinert. “Due to the sudden downturn in the photovoltaic market in China, Chinese manufacturers have made increasing inroads into the international markets, creating massive price pressure. Due to the market situation, many photovoltaic projects have been postponed in anticipation of further falling prices. In addition, business in commercial PV systems, in particular, was affected by the limited availability of electronic components – a situation that has since been resolved. The storage business also fell short of expectations due to a supply shortage from the battery manufacturers.”

Optimism for 2019

Announcing the 2018 figures, the board said it was optimistic this year sales will again grow to €800-880 million, bringing positive EBITDA of €20-50 million. Positive developments in Europe and America, as well as a revival of the storage market, were cited as reasons for optimism. In addition, developers are resuming projects and more large-scale PV plants are again being built.

“We have already started to implement the … measures [resolved upon], which will enable us to reduce our fixed costs, improve utilization of the available capacity and thus safeguard the future viability of SMA,” said Reinert.

Last month, SMA said it would cut 425 full-time jobs by next year – around 13% of its workforce. The company also sold its activities in China to the local management team.

Reinert said SMA will now concentrate on its core competences and reduce complexity at all levels. At the same time, it plans to position itself in the important future fields of energy management, storage integration, re-powering and digital business models.