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SMA Solar Technology AG Records High Loss in 2018 as Expected - Business Performance and Cost Reduction Program Develop as Planned in First Quarter of 2019Niestetal, )
Overview of fiscal year 2018:
- Inverter output sold at same level as previous year with around 8.5 GW (2017: 8.5 GW)
- Sales of €760.9 million influenced by increased price pressure due to slump on Chinese market (2017: €891.0 million)
- Earnings before interest, taxes, depreciation and amortization (EBITDA) of
€–69.1 million significantly impacted by one-time items (2017: €97.3 million)
- Equity ratio still high at 42.9% (December 31, 2017: 50.3%) and high net cash of €305.5 million (December 31, 2017: €449.7 million)
- Managing Board anticipates sales of €160 million to €170 million and EBITDA between €–5 million and €0 million in first quarter of 2019 and confirms sales and earnings guidance for the year as a whole
In fiscal year 2018, SMA Solar Technology AG (SMA/FWB: S92) sold inverters with an accumulated output of around 8.5 GW. Inverter output sold was thus on a par with the previous year (2017: 8.5 GW). The SMA Group’s sales fell to €760.9 million (2017: €891.0 million), primarily due to the abrupt decline in the PV market in China, as a result of which Chinese providers increasingly advanced into international markets and caused enormous price pressure there. EBITDA amounted to €–69.1 million (EBITDA margin: –9.1%; 2017: €97.3 million, 10.9%) and was significantly impacted by one-time items.
Net income came to €–175.5 million (2017: €30.1 million). Earnings per share thus amounted to €–5.06 (2017: €0.87). Net cash remained at a high level at €305.5 million (December 31, 2017: €449.7 million). With an equity ratio of 42.9% (December 31, 2017: 50.3%) at the end of 2018, SMA has a solid balance sheet structure. In addition, the company has a credit line of €100 million from domestic banks.
“2018 was a challenging year for SMA,” said SMA Chief Executive Officer Jürgen Reinert. “Having started the fiscal year with a high order backlog, the continuing shortage of electronic components meant that in the first half of the year we were only able to supply our customers to a limited extent, particularly in the commercial PV systems segment. At the end of May, the Chinese government drastically reduced its PV expansion targets and solar power subsidies with immediate effect. As a result, Chinese providers increasingly advanced into international markets and caused enormous price pressure in all segments. In the second half of the year, project developers and investors postponed the implementation of photovoltaic projects until the following year in anticipation of a further decline in prices. In addition, the storage technology growth segment was affected by the limited availability of battery-storage systems.
We responded early on and introduced measures to reduce costs and increase sales in order to quickly return SMA to profitability. The sale of our Chinese subsidiaries has been completed. Although a staff reduction in Germany unfortunately could not be avoided, we were able to implement it in a socially responsible manner with a voluntary severance program.”
For the first quarter of 2019, the SMA Managing Board is anticipating sales of €160 million to €170 million (Q1 2018: €182.5 million) and EBITDA between €–5 million and €0 million (Q1 2018: €17.5 million). The SMA Managing Board is confirming its sales and earnings guidance for the 2019 fiscal year as published on January 24, 2019, which forecasts sales of between €800 million and €880 million and EBITDA of between €20 million and €50 million. The Managing Board estimates that depreciation and amortization will amount to approximately €50 million. “Since the start of the year, SMA has posted a high order intake and a positive business development,” said Reinert. “We will reinforce this trend over the course of the year by tapping into new business fields, such as large-scale storage systems and repowering, and by introducing new, cost-optimized products and system packages. We will also seize the opportunities arising from market consolidation and the anticipated growth in the Utility and Storage segment and in the EMEA and Americas regions.”
The SMA Annual Report for 2018 is available online at www.SMA.de/IR/FinancialReports.
This press release serves only as information and does not constitute an offer or invitation to subscribe for, acquire, hold or sell any securities of SMA Solar Technology AG (the “Company”) or any present or future subsidiary of the Company (together with the Company, the “SMA Group”) nor should it form the basis of, or be relied upon in connection with, any contract to purchase or subscribe for any securities in the Company or any member of the SMA Group or commitment whatsoever. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended.
This press release can contain future-oriented statements. Future-oriented statements are statements which do not describe facts of the past. They also include statements about our assumptions and expectations. These statements are based on plans, estimations and forecasts which the Managing Board of SMA Solar Technology AG (SMA or company) has available at this time. Future-oriented statements are therefore only valid on the day on which they are made. Future-oriented statements by nature contain risks and elements of uncertainty. Various known and unknown risks, uncertainties and other factors can lead to considerable differences between the actual results, the financial position, the development or the performance of the corporation and the estimates given here. These factors include those which SMA has discussed in published reports. These reports are available on the SMA website at www.SMA.de. The company accepts no obligation whatsoever to update these future-oriented statements or to adjust them to future events or developments.
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