SMA Solar Technology’s sales for 2021 came in below prior expectations for the year as the inverter supplier was impacted by a shortage of electronic chips – a headwind it expects to persist in the coming months.
The company sold inverters with a cumulative output of 13.6GW in 2021, compared with 14.4GW in 2020, meaning sales were down 4% year-on-year to €984 million (US$1.09 billion).
SMA attributed this drop to the “considerable challenges” in relation to the coronavirus pandemic and electronic chips supply, which the company said became increasingly strained over the course of 2021, with suppliers unable to satisfy rising demand as a result of the economic recovery and increased digitalisation.
This leads sometimes to “substantial prolongation of delivery periods culminating in delivery failure”, the company said.
Jürgen Reinert, CEO at SMA, said that as a European manufacturer, the company was particularly affected because electronic component suppliers tend to be located in the US and have the goods produced in China. “Accordingly, the customers in these regions are given preferential treatment when it comes to supply.”
Component shortages were also revealed last year by the likes of Tesla, with CEO Elon Musk noting that production of the company’s energy storage units was being hampered by the global semiconductor chip shortage, while Enphase Energy revealed last July that component availability was constrained.
SMA’s EBITDA plummeted from the €72 million posted in 2020 to €9 million last year, which was due to the termination of a long-term contract for solar O&M services. A provision for anticipated losses of €34.5 million was recognised for the termination, SMA revealed in its annual report.
The company exited the unfavourable contract in order to cut losses and free consecutive fiscal years from financial burdens, Reinert said, adding: “There is no other contract in SMA’s O&M portfolio that shows comparable conditions.”
In terms of SMA’s sales by region, around half came from Europe, the Middle East and Africa last year, 31% from the Americas and 18% from the Asia-Pacific region, with the US, Germany and Australia being its main markets.
Despite the lower than expected results for 2021, SMA increased its order backlog to around €887 million. It was announced last year that the company was selected to supply 109 central inverter units to a 250MW / 250MWh battery energy storage system being installed by technology company Wärtsilä in South Australia.
SMA management has confirmed its 2022 guidance as published earlier this month, which forecasts sales of €900 – 1,050 million and EBITDA of €10 – 60 million.
For Q1 2022, sales are expected to be €210 – 220 million, down on the €240.4 million posted in the same quarter last year, and EBITDA of €12 – 16 million, compared with €20.1 million in Q1 2021.
“We expect the shortage of electronic components to continue in the coming months,” Reinert said. “However, we will continue to do all we can to also satisfy our order intake, which remains very healthy. In the medium to long term, we see outstanding growth potential for SMA.”