Chinese acquisition drags on SMA
Zeversolar, the Chinese inverter maker recently acquired by SMA Solar, significantly dented the German inverter maker's third-quarter performance, with SMA claiming that Zeversolar will not be profitable in the near future.
Unable to crack into the booming Chinese PV market on its own, SMA – the world’s largest PV inverter maker – bought Zeversolar in several batches this year, leaving it with a nearly 90% stake in the company.
But SMA today heaped much of the blame for its €30.1m ($40.7m) third-quarter operating loss – compared to a profit of €116m during the same quarter last year – on its loss-making Chinese subsidiary.
Zeversolar will make a positive contribution to SMA’s earnings “only in the medium term”, SMA warns, despite China’s intention to add 10GW of PV capacity annually over the next few years.
SMA is in the process of implementing a “large number of restructuring measures” at Zeversolar to “increase productivity and quality, and lower material costs sustainably”. The measures will be completed by the end of the year.
No job cuts were announced for Zeversolar, which employs nearly 400 people. SMA is in the process of shrinking its headcount in Germany by 700.
Even excluding restructuring costs, Zeversolar is expected to lose €15m this year.
Zeversolar’s ZOF-brand central inverters will make the biggest near-term contribution to its business, while its Evershine and Eversol string inverters are “less important”, SMA says.
SMA says it would have broken even during the third quarter in the absence of one-off “personnel adjustment” expenses in Germany and Zeversolar.
SMA sold just 4GW of inverters through the first three quarters of the year – compared to 5.9GW last year – largely due to weakness in the European market. Revenues slid 40% to €709.3m.
SMA intends to launch a new inverter next year – the Sunny Boy Smart Energy model – which incorporates an integrated battery.
SMA also revealed that it anticipates producing inverters at its new facility in South Africa by spring 2014.