SMA Solar sales continue slump on market conditions and competitive pricing

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Although international sales accounted for 67.4% of revenue in the first-half of 2013, SMA Solar Technology’s dependence on the shrinking German and Italian markets saw PV inverter unit sales decline 38% to 2.5GW, compared to 4GW sold in the same period a years ago.

The PV inverter leader reported first-half of year sales in line with previous projections at €461.5 million, down 45% from €833.7 million the same period of 2012.

The company noted that weaker demand, high pricing pressure and a change in product mix away from residential inverter sales to commercial and utility-scale systems meant the company posted a negative EBIT of €23.3 million in the first-half of 2013.

On a regional basis, SMA Solar’s strongest market remained Germany. However sales slumped significantly. The company reported sales of €154.9 million in its domestic market for the period, compared to €400.6 million if the first-half of 2012.

The competitive market place in other key markets impacted international sales in the period covered which were down around 31%, compared to the same period a year ago, while accounting for over 67% of sales.

SMA Solar noted that the strongest residential markets for its Medium Power Solutions Division were the US, Australia and the Netherlands.

SMA’s Power Plant Solutions Division suffered from a 9.1% decline in sales (€177.1 million) in the first-half of 2013 as the market shifted to the US and Asia where pricing pressure is highest. Power plant sales as a percentage of total sales has increased significantly in the last 12 months reaching 38.4% of sales, compared to 23.4% in the first half of 2012.

Restructuring Zeversolar

SMA Solar’s majority-owned inverter operation in China, Zeversolar, was said to be undergoing a major restructuring as sales to Europe in the last six months were said to have collapsed due to the market demand demise.

Sales of only €3.3 million in the first half of the year were mainly generated only in China. The company said that it was undertaking restructuring of Zeversolar in order to improve productivity, while addressing quality and material cost issues.

Pierre-Pascal Urbon, SMA Solar’s CEO said in a statement: “SMA will continue to invest in technology development to further lower manufacturing costs with entirely new product platforms. We will also pursue our globalisation strategy to benefit from demand stimuli in photovoltaic markets outside Europe through a strong local presence.

“The slump in demand in Europe forces additional cost cutting measures and an adjustment to the personnel structures. By implementing the different measures, we will sustainably improve our competitiveness. In the medium-term, as a specialist for system technology SMA is set to benefit from the trend toward energy management, construction of PV power plants and the supplementation of stationary diesel gensets with PV systems.”

The company reiterated its wide full-year sales guidance of €0.9 billion to €1.3 billion, down from 2012 sales of €1.463 billion. 

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