SMA Solar Technology AG, the German solar PV inverter manufacturer, has once again adjusted its EBITDA guidance for 2021, bringing it down from €50 million to €65 million to now €20 million and €30 million, citing trouble in an existing O&M service contract.
Previously, the management had lowered EBITDA and sales guidance for 2021 owing to shortage of electronic components (see SMA Solar Lowers Financial Forecast For 2021).
Without disclosing any more details about the said project, SMA Solar said after concluding the contract with the customer, 'defects' in some of the solar parks to be maintained by SMA's O&M business came to light. It is now in negotiations with the customer to pull out of the agreement for good.
Calling the early dissolution of an existing O&M agreement as a unique case, SMA Solar's CEO Jürgen Reinert explained, "It would only have been possible through unjustifiable expenses for SMA to fulfil its contractual obligations regarding the performance of the PV power plants. Accordingly, after thorough consideration, we have decided to aim for a cancellation agreement in order to shield SMA from greater damage."
The German company, however, is counting a high order backlog to help it report significant sales growth on overall basis in 2022 (see SMA Solar's 9M/2021 Financial Results).