SMA Solar’s large scale and project solutions business drove the group sales in H1 2024
Home solutions and C&I segments bore the brunt of high inventory levels at distributors and installers
Management is diverting capacity into the large-scale segment to process the high order backlog
German solar PV inverter supplier SMA Solar Technology blamed ‘ongoing’ high inventory levels at distributors and installers and generally a ‘very challenging market environment’ for its sales having dropped 3% year-over-Year (YoY) to €759.3 million in H1 2024.
As of June 30, 2024, SMA’s inventories increased to €711.7 million from €559.1 million on December 31, 2023, ‘in anticipation of the future upturn in business development and the high inventory levels on the customer side’.
It had 9.107 GW inverter output sold, a significant increase of 26.3% annually over 7.213 GW.
Home solutions segment reported a major decline with €110 million compared to €327.3 million in the previous year, while commercial and industrial (C&I) solutions segment contributed €113.6 million, down from €194.2 million in H1 2023 (see Home Solutions Lead Business For SMA Solar).
Compared to H1 2023 when home solutions led the group’s business, this year it was the large scale and project solutions business driving it forward. SMA’s group EBITDA of €81 million, representing 36% annual decline, had large scale & project solutions business reporting €101 EBIT this year, up from last year’s €9 million. The management attributed high EBIT in this segment to high level of sales and associated fixed cost degression along with a profitable product mix.
On the other hand, lower sales, reduced utilization and corresponding lack of coverage costs resulted in the EBIT of the other 2 business verticals going down below previous year. SMA’s group net income declined by over 57% YoY to €44 million.
In terms of its order backlog, the product order demand of €988 million reflects the soft current market demand for home and C&I segments, and strong for large scale. At the end of June 2024, its total order backlog was worth €1.35 billion, majorly from the EMEA region.
“The global PV market has developed very inconsistently this year. Incoming orders in the Home and Commercial & Industrial segments continue to be influenced by the high inventory levels at distributors and installers,” said SMA CEO Jürgen Reinert. “In addition, electricity prices have gone down, which in many countries is resulting in postponed investments and restrained final demand, as well as excess capacity by Chinese manufacturers, which is putting additional pressure on the market.”
The company is now directing capacity into the large scale segment to process the high order backlog as planned, added the CEO. Additionally, he said customers anticipate further drop in prices.
The management has reiterated its sales and earnings guidance for FY 2024 with sales guided between €1.55 billion and €1.70 billion, and EBITDA within €80 million and €130 million.