SMA Solar Technology AG dropped the most in more than five months after Germany’s biggest solar-energy company by market value predicted a “tough year” for the industry and confirmed it may lose money in 2013.
SMA fell as much as 14 percent, to 17.485 euros a share in Frankfurt, the steepest intraday decline since Oct. 19, after the Niestetal-based company said in a statement today that while it may reach a break-even result, it “cannot exclude the possibility of a loss,” in line with a forecast in October.
Earnings before interest and taxes and a dividend proposal fell short of analyst expectations, Stefan Freudenreich, an analyst at Equinet, said in an e-mailed note. “SMA reported disappointing results this morning which should pressure the stock today.”
Ebit fell 58 percent to 102 million euros ($131 million) in 2012 after subsidy cuts implemented late last year damped sales in Europe, including in Germany, the biggest solar market by installed capacity. The company proposed a dividend of 0.60 euros a share, from 1.30 euros last year. SMA, the biggest supplier of inverters that convert power from photovoltaic panels for use in the grid, expects sales and profit to further decline this year.
“2013 will be a tough year for the solar sector,” Chief Executive Officer Pierre-Pascal Urbon said in the statement. “Due to our development of innovative system technology and energy management solutions, companywide efforts to reduce costs and consistent internationalization, we believe that SMA is well-positioned to take the opportunities arising in the international photovoltaic markets.”
SMA’s net liquidity of 446.3 million euros helps it last through “stormy weather” and increase sales in the medium term as competitors struggle with pricing pressure, Urbon told a conference call with analysts. “We have the financial strength to really be ahead of the pack.”