SMA CEO plays down impact of Trump presidency

SMA chief executive officer, Pierre-Pascal Urbon, has given his initial view of the Trump presidency, suggesting it potentially heralds both positives and negatives for the US solar sector, but that any major impact is likely to be muted – initially at least - by existing incentive mechanisms. 

Commenting on the election outcome while delivering the inverter manufacturer’s nine month figures, Urbon observed: “While the introduction of import duties on Chinese goods in the US as it is planned by Trump could be advantageous for us, he has never made a secret of the fact that he doesn’t think much of renewable energy.”

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But Urbon also pointed out that the Investment Tax Credit incentive programme was passed jointly by both Democrats and Republicans in Congress. “Therefore, the situation should not be overestimated at present,” he said.

Urbon’s comments came as the German inverter giant confirmed a downgrade in its economic forecast for the 2016 fiscal year. The new forecast anticipates sales of €900-€950m ($981m-$1.03bn) and earnings before interest and taxes (EBIT) of €60-€70m.

This compares with a first half forecast of €950-€1050m in sales and EBIT of €80-€120m for the whole of 2016.

SMA points to increasing price pressure across all sectors and long delays to major projects in Europe, the Middle East and Africa as well as in the US market as the primary cause of the downgrade in its outlook. Another factor influencing the market is the halving of the Chinese photovoltaic market.

For 2016 SMA forecasts 73GW of total PV capacity installations, equivalent to growth of some 41% on 2015. However, pricing pressure is such that their forecast for worldwide inverter sales shows growth of just 8%.

SMA Solar Technology did increase sales 3.2% year-on-year from January to September 2016 despite challenging pricing in all market segments and regions. However, this overall figure masks a downturn in the European domestic sector, offset by growing commercial sales.

In its domestic division, which accounts for 20% of total sales, 2016 figures were down to €142m against €186.4m in the first nine months of 2015. SMA attributes this downturn to lower demand in the US, Australia and Germany.

However, commercial sales grew by 36% year-on-year to hit €195m against 2015’s €143.3m. Sales for the utility division stayed relatively flat at €288.5m, though this segment makes up some 40% of total inverter sales for SMA.

From January to September 2016, SMA sold PV inverters with a cumulative power of 5.65GW, compared with 5GW in the 2015 equivalent period.

As a result of increased sales volumes and reduction in fixed costs, earnings before interest, taxes, depreciation and amortization (EBITDA) improved to €107.9m in the first nine months of 2016. This compares with 2015’s €64.6m over the equivalent period.

“In a market environment characterized by increasing price pressure, SMA has shown its strengths in the first nine months of 2016 and considerably increased its net cash flow,” said Urbon.

“Our goal is to at least absorb the market fluctuations while also keeping costs as low as possible.”

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