SMA Solar Technology Ag (SMTGF.PK) Wednesday reported a sharp decline in annual profit, as sales declined amid a reduction in selling prices and a downturn in business. The energy equipment supplier expects a tough year for the solar sector in 2013.
Consolidated net profit plunged to 75.1 million euros from last year's 166.1 million euros .
Earnings before interest and taxes or EBIT declined to 102 million euros from 240.3 million euros in 2011. EBIT margin declined to 7 percent from 14.3 percent. The company attributed the decline to drop in selling prices for PV inverters and increased risk provisioning.
Annual sales dropped to 1.463 billion euros from 1.676 billion euros a year ago,. Yet, sales were in line with the forecast of 1.3 billion euros to 1.5 billion euros that was adjusted upward in August 2012.
According to the company, new PV systems with a total power capacity of approximately 31 gigawatts were newly installed in the year, compared to around 29 GW in the prior year. SMA sold inverters with a total output of 7.2 gigawatts in 2012, compared to 7.6 GW in 2011.
Additionally, the company announced a dividend of 0.60 euros per share.
Further, the firm confirmed its sales and earnings guidance, including Zeversolar, for 2013. The company expects sales of 0.9 billion euros to 1.3 billion euros and a break-even result in the best scenario. The Board does not exclude the possibility of a loss.
SMA Chief Executive Officer Pierre-Pascal Urbon predicted that 2013 would be a tough year for the solar sector.
''The photovoltaic market is currently undergoing major changes...Due to our development of innovative system technology and energy management solutions, company-wide efforts to reduce costs and consistent internationalization, we believe that SMA is well positioned to take the opportunities arising in the international photovoltaic markets,'' he said.
The stock closed up 2.2 percent on Tuesday at 20.36 euros.
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