The Managing Board of SMA Solar Technology AG (SMA/FWB: S92) has adjusted its sales and earnings forecast for 2014. For the current fiscal year, the SMA Managing Board expects sales of between €775 million and €790 million (previously: €850 million to €950 million) and a loss of up to €115 million excluding provisions for the planned staff reduction (previously: loss of up to €45 million excluding provisions for the staff reduction). The Managing Board gives the further accelerated decline in demand in the European distribution business and project delays in Great Britain as reasons for lowering the forecast for the current fiscal year. Furthermore, earnings are impacted by additional one-time items.
"Our previous forecast was based on the assumption of a strong sales upturn toward the end of the year. Unfortunately, markets in Europe have not developed as well as expected. The British government has unexpectedly extended the deadline for the grid connection of large-scale PV plants under the current subsidy regime by one year to March 31, 2016. As a result of this, a large number of projects will be delayed until 2015. In addition, distribution business has declined dramatically in Europe, particularly in Germany. This trend has not been reversed over the last months," said SMA Chief Executive Officer Pierre-Pascal Urbon. According to Urbon, low sales levels and one-time items resulting from the market consolidation are the main reasons for the deterioration in earnings. The success already achieved in material cost reduction could not be recognized in earnings as planned because of effects of volume.
In order to return to profitability, SMA will further intensify the measures already initiated. For example, the Managing Board is planning to reduce the development budget to approximately €80 million annually by the middle of 2015. SMA is planning to lay off significantly more than 600 employees worldwide by mid-2015. In addition, the Chinese subsidiary Zeversolar will be restructured. Urbon stressed that, with expected liquidity of more than €250 million at the end of the year 2014 and an equity ratio of approximately 50%, SMA can finance the transformation from its own resources.
Disclaimer:
This press release serves only as information and does not constitute an offer or invitation to subscribe for, acquire, hold or sell any securities of SMA Solar Technology AG (the "Company") or any present or future subsidiary of the Company (together with the Company, the "SMA Group") nor should it form the basis of, or be relied upon in connection with, any contract to purchase or subscribe for any securities in the Company or any member of the SMA Group or commitment whatsoever. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended.
This press release can contain future-oriented statements. Future-oriented statements are statements which do not describe facts of the past. They also include statements about our assumptions and expectations. These statements are based on plans, estimations and forecasts which the Managing Board of SMA Solar Technology AG (SMA or company) has available at this time. Future-oriented statements are therefore only valid on the day on which they are made. Future-oriented statements by nature contain risks and elements of uncertainty. Various known and unknown risks, uncertainties and other factors can lead to considerable differences between the actual results, the financial position, the development or the performance of the corporation and the estimates given here. These factors include those which SMA has discussed in published reports. These reports are available on the SMA website at www.SMA.de. The company accepts no obligation whatsoever to update these future-oriented statements or to adjust them to future events or developments.
"Our previous forecast was based on the assumption of a strong sales upturn toward the end of the year. Unfortunately, markets in Europe have not developed as well as expected. The British government has unexpectedly extended the deadline for the grid connection of large-scale PV plants under the current subsidy regime by one year to March 31, 2016. As a result of this, a large number of projects will be delayed until 2015. In addition, distribution business has declined dramatically in Europe, particularly in Germany. This trend has not been reversed over the last months," said SMA Chief Executive Officer Pierre-Pascal Urbon. According to Urbon, low sales levels and one-time items resulting from the market consolidation are the main reasons for the deterioration in earnings. The success already achieved in material cost reduction could not be recognized in earnings as planned because of effects of volume.
In order to return to profitability, SMA will further intensify the measures already initiated. For example, the Managing Board is planning to reduce the development budget to approximately €80 million annually by the middle of 2015. SMA is planning to lay off significantly more than 600 employees worldwide by mid-2015. In addition, the Chinese subsidiary Zeversolar will be restructured. Urbon stressed that, with expected liquidity of more than €250 million at the end of the year 2014 and an equity ratio of approximately 50%, SMA can finance the transformation from its own resources.
Disclaimer:
This press release serves only as information and does not constitute an offer or invitation to subscribe for, acquire, hold or sell any securities of SMA Solar Technology AG (the "Company") or any present or future subsidiary of the Company (together with the Company, the "SMA Group") nor should it form the basis of, or be relied upon in connection with, any contract to purchase or subscribe for any securities in the Company or any member of the SMA Group or commitment whatsoever. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended.
This press release can contain future-oriented statements. Future-oriented statements are statements which do not describe facts of the past. They also include statements about our assumptions and expectations. These statements are based on plans, estimations and forecasts which the Managing Board of SMA Solar Technology AG (SMA or company) has available at this time. Future-oriented statements are therefore only valid on the day on which they are made. Future-oriented statements by nature contain risks and elements of uncertainty. Various known and unknown risks, uncertainties and other factors can lead to considerable differences between the actual results, the financial position, the development or the performance of the corporation and the estimates given here. These factors include those which SMA has discussed in published reports. These reports are available on the SMA website at www.SMA.de. The company accepts no obligation whatsoever to update these future-oriented statements or to adjust them to future events or developments.
