PV inverter specialist, Power-One reported fourth quarter revenue of US$192 million, within revised guidance but sales declined 32% in Europe, forcing the company to adjust production to demand with the planned loss of 300 jobs.
As previously stated, weaker than expected demand in Germany and Italy due to FiT changes were behind the declines, although revenue from Asia Pacific was also down after a seasonally strong third quarter in Australia. The company said that sales in North America increased based on demand for string inverters for both residential and commercial markets.
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Power-One reported inverter shipments of 628MW in Q4 2012 and 3.6GW for the full-year, up 23% from 2011. Renewable Energy Solutions segment generated sales of US$123 million and an operating loss of US$8.5 million.
However, management said in a conference call to discuss quarterly results that at the beginning of the fourth quarter it undertook a workforce reduction of 300, or around 3% of its workforce, primarily from its manufacturing operations to “right size” to “match the shifting demand environment.”
Weak demand in Europe also led to higher than expected ASP erosion due to the competitive environment. ASP declines were said to have been in the low-teens in the fourth quarter, while declines in the double-digit range were expected in 2013.
The company reported a gross margin of 13% for the fourth quarter, down from the 29% gross margin in the third quarter.
On a geographical basis, EMEA represented 76% of RE revenue with 28% of total revenue coming from Italy, 17% from Germany and 31% from the rest of the region. Asia Pacific represented 9% of total RE revenue and North America was 15%.
Market expectations
Despite the restructuring, Power-One management said they expected the North American the market to grow by over 40% in 2013 as large commercial and utility-scale sectors remained strong. The company claimed to have approximately 20% market share in residential string inverters, but less than 10% of the overall market.
Management also highlighted market growth in China, driven by the utility-scale sector. Power-One noted that it would be focusing on EPC and utility companies, via a partnership with Phono Solar to build its business in the country. The company also expects to create strategic alliances in Japan to access the market in 2013.
“In India, solar installations are expected to almost double in 2013 as the government continues to support pro-solar policies. 2012 was a disappointing year for us in India, particularly given our initial success in 2011,” noted Richard Thompson, President and CEO of Power-One.
Management said that it expected the European market to decline around 24% in 2013 to between 12,000MW – 13,500MW, down from 16,800MW in 2012.
The German market is expected to be in the range of 4,200MW – 4,800MW, a 42% decline from 2012. However, The Italian market is expected to decline the most at 49%, with PV installations expected to be the range of 1,800MW – 2,200MW in 2013.
Guidance
Power-One said it expected Q1 2013 revenue to be in the range of US$175 million to US$200 million, a wide range due to seasonality and an expected subdued market in Germany and Italy.
