SMA Solar to Cut 600 More Jobs as It Lowers Full-Year Forecast

Jul 30, 2014 5:53 am ET

July 30 (Bloomberg) -- SMA Solar Technology AG, Germany’s biggest solar company, said it may lose as much as 45 million euros ($60 million) this year because of “stagnating” demand in the solar industry. Shares fell the most in seven months.

SMA cut its sales forecast to 850 million euros to 950 million euros, from 1 billion euros to 1.3 billion euros earlier, it said today in a statement. The company will fire 600 more workers after it said in July last year it would cut 700 full-time positions, or 800 people, by the end of this year.

“We expect to see a stagnation in the worldwide demand for PV systems for 2014 as a whole,” Chief Executive Officer Pierre-Pascal Urbon said. “Particularly in the core markets in Europe, demand has collapsed even further than expected due to further cuts in subsidies.”

SMA cut jobs and is reducing costs in a bid to counter falling sales in Europe. The company, which had earlier forecast operating profit of as much as 20 million euros, now expects to “break even at best,” according to the statement.

SMA plunged as much as 13 percent in Frankfurt, to 22.665 euros a share, its lowest intraday value since Dec. 30. It traded at 22.81 at 11:32 a.m. local time.

While Urbon said he expects solar markets to become “far more dynamic” in coming months compared with the first half, installations in North America, Japan and China will dominate, he said. The biggest solar market, China, is particularly hard to penetrate for foreign companies.

“The cut-throat competition is keeping pricing pressure high in the industry,” Urbon said.