Financial analysts had raised concerns last week about SMA Solar being able to retain its previously reported financial guidance for 2011, after what many felt was a rather solemn analyst day held last week. At a Board meeting today, SMA did indeed lower is revenue guidance by a significant amount, highlighting the underlying weaker than expected demand recovery in the third quarter of the year.
SMA management said in a statement that: ‘Contrary to Managing Board expectations, SMA has established only a minor upturn in the high-volume business of solar inverters for roof systems. Pleasing development in the central inverters business for large-scale solar power plants cannot fully compensate for the weak commercial order situation.’
SMA cut €200 million from its forecast, down from a maximum of €1.9 billion to €1.7 billion. The lower level of €1.5 billion remained in place.
SMA said that its EBIT corridor had been revised downwards to between €220-€300 million, compared to previous guidance of between €315 and €475 million.
According to Jeffries International, equity analyst, Gerard Reid, SMA lowered its guidance after meeting major clients at the weekend that attended its Sunny Pro Club meeting.
Reid said in an investor note that the cuts to guidance were deeper than expected, and a ‘clear indicator that demand for solar is not picking up.’
The financial analyst also noted that should SMA only achieve revenue and margins at the bottom of the revised range SMA would have an EBIT margin of 14.6%, much lower than the ‘Street’ is currently (19.5%) forecasting.