SMA reports losses for first half of 2019
Aug 9, 2019 01:51 PM ET
- For the second half of the year, the German inverter producer expects a significant increase in revenues and earnings, mainly due to high order intake. It also confirmed its forecast for the full fiscal year, despite declining sales and sales in the first six months of 2019.
SMA Solar Technology AG has had a rather difficult first half. Inverter sales declined from the same period a year earlier, from 4.3 GW to about 4.0 GW, while turnover fell by 8.1% to €362.7 million, mainly due to the weakness of its project business.
In the rooftop PV segment, by contrast, SMA recorded a significant increase in sales of more than 20%. Its operating result (EBIT) worsened significantly compared to the first half of 2018, when SMA posted a profit of almost €14.7 million. For the first six months of this year, it has reported a loss of €14.4 million. In the second quarter of 2019, the EBIT loss was just under €3.7 million, with sales of around €195 million.
Nevertheless, SMA remains optimistic about its business this year. Incoming orders in all segments developed smoothly in the first six months of 2019, particularly in the area of large PV plant solutions. The company estimated its order book stood at €818.7 million at the end of the first half, with €453.1 million in its products business. On this basis, it expects a significant increase in sales and earnings for the second half of the year.
“The implementation of projects in the Large Scale & Project Solutions segment, which accounts for a large part of the order backlog, usually takes four to ten months. We therefore expect a significant sales increase here only in the second half of the year,” explained SMA CEO Jürgen Reinert.
The company’s board confirmed its previous guidance for the current year. SMA expects sales of between €800 million and €880 million for this fiscal year. EBITDA is predicted to range between €20 million and €50 million. No information was given on the expected EBIT.
As for the company’s cost-reduction program, SMA said it is moving forward according to plan. In mid-December 2018, SMA announced that it would cut 425 full-time jobs worldwide by 2020. This is around 13% of all its workforce.
In addition, the company has sold its operations in China to local management. After a solid first half, the business collapsed in the final six months of 2018. due to the abrupt policy change in China, which was announced at the end of May 2018. That policy shift led to massive price pressure on the international PV market, a situation that exacerbated delivery bottlenecks for the company.
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