When Zvi Lando, chief executive of Israeli PV inverter company Solaredge said yesterday his company's fourth-quarter results were “reflective of strength in the U.S. residential market and record revenues from outside of Europe and the U.S., led by Australia,” it is fair to assume he was referring to two encouraging developments.
However, the figures paint a picture of a tough fourth quarter, year-on-year, compared to the final three months of the Covid-free days of yore in 2019. What is beyond argument is that the inverter maker–which describes itself as a “smart energy” business after venturing into storage tech–achieved an impressive year of revenue progress on the 2019 results despite the global travails caused by Covid-19, and despite that tough end to the year.
Solaredge, which published its fourth-quarter and full-year 2020 results yesterday, shipped 1.36 GWac of inverters from October to December but nevertheless saw revenues fall to $358 million from the $418 million registered in the same period of 2019, just as the pandemic was stirring in China.
That meant gross profits in the last three months of last year came in at $110 million, from $143 million 12 months earlier just as R&D, sales and marketing and administrative expenses rose. Pre-tax profits in Q4 slumped to $24.8 million from the $61.6 million posted in October-to-December 2019, for a year-on-year fall in net income from $52.3 million to $17.7 million.
Far from capping a year of retreat, however, the close of 2020 failed to mask 12 months of revenue progress after Solaredge shipped 6.1 GWac of inverters in the period. That volume drove record annual revenues of $1.46 billion, mostly on the back of a record $1.36 billion raised from the sale of solar products, for a $300 million upside from the figure posted for 2019.
The revenue uplift was not sufficient to stave off an $18 million fall in gross profit, to $461 million, and rising R&D, sales and marketing and general administrative spending prompted a fall in pre-tax income, year on year, from $179 million to $164 million in 2020. That added up to a marginal fall in net income for last year, from $145 million in 2019 to $140 million. Not bad during a global health pandemic.
With Solaredge having freed up around $25 million in restricted bank deposits since the end of 2019, the company's cash balance has risen from $224 million, at that point, to an $827 million warchest on December 31. The inverter maker secured more payments owed from its customers and piled up more inventory, year on year–further prudent actions during exceptional market conditions.
And the company was optimistic enough to predict a rebound in revenues from the fourth-quarter figures, with expectations of $385-405 million during the current three-month window, on the back of predicted solar income of $360-375 million.
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