German inverter maker SMA Solar Technology (ETR:S92) saw its net profit shrink to EUR 8.5 million (USD 9.7m) in the first nine months of 2018, from EUR 25 million a year ago.
Sales contracted by 2.9% to EUR 575.1 million even though photovoltaic (PV) inverter sales grew to 6.2 GW from 5.9 GW a year earlier.
The company said today its performance in the period has been affected by increased price pressure in all markets and regions following the market slump in China and also by project postponements. SMA CEO Juergen Reinert explained that project developers and investors are increasingly delaying the construction of large solar parks until next year as they expect prices to keep falling. Thus, in recent months orders received at SMA have been significantly behind expectations.
“We will adjust our structures to react even more flexibly to the new conditions and to increase SMA’s profitability quickly and sustainably,” the CEO said. This includes restructuring measures to be agreed upon and adopted with the employee representatives by the end of 2018.
Meanwhile, SMA plans to introduce new developments into the markets along with its existing cost-optimised products in a bid to counter the increasing price pressure in the component business. “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,” Reinert added.
Results for the nine months are in the table below.
| Results in EUR |
9-mo 2018 |
9-mo 2017 |
| Sales |
575.1m |
592.5m |
| EBITDA |
50.5m |
55.3m |
| EBITDA margin (in %) |
8.8 |
9.3 |
| Gross margin (in %) |
23.1 |
21.1 |
| Net income |
8.5m |
25m |
| Earnings per share |
0.24 |
0.72 |
At the end of September, SMA had 373.2 million in net cash, down from EUR 449.7 million at the end of 2017, and an equity ratio of 53.3%, up from 50.3%.
Today SMA also confirmed its sales and earnings before interest, tax, depreciation and amortisation (EBITDA) guidance, as updated in September. It expects sales of between EUR 800 million and EUR 850 million and a break-even or slightly negative EBITDA after one-time items from restructuring. For the first time, EBITDA includes over EUR 10 million in costs for setting up the digital business. Depreciation and amortisation is expected to amount to some EUR 50 million.
(EUR 1 = USD 1.144)
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Source: SMA Solar Technology
