SMA Solar sales surpass projections; reiterates full-year guidance

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PV inverter market leader SMA Solar Technology exceeded analyst expectations for its second quarter financial results. Despite European demand remaining “dulled” in the first half of the year and the US market failing to fill this void, SMA reported 3.1GW of inverter output sold – almost at the same level as 2010 and double that of Q1 2010.

SMA posted sales of €715 million in the first half, down from €815.8 million reported in same period a year ago, highlighting pricing pressures this year compared to last. This impacted EBIT, which dropped 53% to €103.7 million from €219.9 million in 2010. Consolidated net profit also fell, coming in at €73.5 million, compared to €158.2 million in 2010.

SMA benefited from a focus on sales outside Germany and strong demand from commercial and utility-scale markets. In the first six months of the year, SMA generated 56.3% of its sales from international markets, compared to 36.4% in the prior year period.

The company noted that its Medium Power Solutions segment was key to it sales success so far this year, generating 73.1% of total sales. Meanwhile its High Power Solutions segment climbed year-on-year by more than 66%, posting sales of €170.6 million.

“The debate surrounding the expansion of photovoltaic energy has deeply unsettled end-customers in major solar markets and led to a reduction in their willingness to invest,” commented SMA CEO and CFO Pierre-Pascal Urbon. “The broad social consensus that now surrounds the intensified expansion of photovoltaic energy, the favourable interest level and the significantly reduced specific costs of constructing a solar power plant compared with the beginning of the year are good conditions for a significant rise in global demand in the second half of the year.”

Urbon echoed the growing list of PV executives and market analysts that expect a strong rebound in demand in the second half of the year. SMA management reiterated its sales and earnings guidance for the current fiscal year – sales between €1.5 billion and €1.9 billion and an EBIT corridor of €315 million to €475 million, resulting in an EBIT margin of 21% to 25%. Margin in the first quarter of 2011 had plummeted to 5.4%, while margins for 2010 were 26.9%.

Rocking Japan

Moving to 2012, SMA Solar expects to play a significant role in the Japanese market after the expected introduction of a new FiT next April. Management noted that it expected a shift to larger scale PV projects as part of the shift away from nuclear dependence.

The company also believes that PV installers in Japan will quickly start selecting the most efficient components to maximise energy harvest and secure reduced system costs.

Management forecasted that the Japanese market would see new demand of 5GW between now and 2013. SMA also noted it had established a sales and service subsidiary in Tokyo in the previous quarter, in anticipation of strong market growth.

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