SMA Solar cuts 2021 earnings forecast in half following O&M contract issue

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
SMA said the O&M contract issue would incur a one-time charge on the company’s earnings in 2021. Image: SMA Solar Technology.

SMA Solar has cut its earnings forecast for the year by more than half pending a contract issue affecting its operations and maintenance business.  

In a statement to the market issued earlier this week, SMA Solar said it had adjusted its earnings guidance for the 2021 financial year, revising it down from a previous forecast of €50-65 million (US$57 – 74 million) to €20-30 million.

The inverter manufacturer said the revision was down to ongoing negotiations between it and a third party in relation to an existing service agreement for its O&M services business, where defects in solar parks maintained by SMA were discovered after the contract was concluded.

Jürgen Reinert, chief executive at SMA, said the possible early dissolution of the agreement was a “unique case” which would have resulted in “unjustifiable expenses” for the company if it had gone on to fulfil its contractual obligations relating to asset performance.

“Accordingly, after thorough consideration, we have decided to aim for a cancellation agreement in order to shield SMA from greater damage. Our decision also expresses our responsible handling of long-term risks for the company as well as our high quality standards,” Reinert said.

Despite cuts to the 2021 earnings forecast, SMA’s managing board has reiterated its confidence in its long-term earnings potential. At the company’s Q3 2021 results in November 2021 SMA pointed towards a bulging order book for the forthcoming year after project delays and pushbacks dented its shipments earlier in 2021.

Read Next

PV Tech Premium
January 18, 2022
olar project developer Eco Energy World is aiming to “aggressively” grow its US PV pipeline after formally entering the market last week and intends to replicate the cheaper engineering, procurement and construction (EPC) costs it sees in Europe in the country. PV Tech Premium speaks to CEO Svante Kumlin to find out more.
PV Tech Premium
January 14, 2022
Raising more than US$1 billion in equity capital in the past year, US independent power producer (IPP) Silicon Ranch is looking to expand its model of developing, owning and operating large-scale PV plants while maintaining a strategy of co-locating projects with regenerative agriculture.
January 11, 2022
PosiGen, a US provider of residential solar and efficiency solutions for low- to moderate-income (LMI) households, has secured US$100 million in preferred equity financing.
January 11, 2022
European solar investor NextEnergy Capital (NEC) has sold a 150MW portfolio of Italian solar assets to Rome-headquartered investment group Tages.
January 10, 2022
Indian renewables company ReNew Energy Global Plc’s wholly owned subsidiary India Clean Energy Holdings has raised US$400 million through a green bond sale that will be used to support the company’s growth strategy and “refinance existing high-cost debt”.
January 10, 2022
Alternative asset manager Blackstone will invest around US$3 billion in Invenergy Renewables to help drive an accelerated build-out of the solar and wind developer’s clean energy platform.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
January 26, 2022
Free Webinar
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 8, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal