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Business

Solar company SMA deeply in the red

Germany's SMA solar company, a leading producer of inverters, has reported a net loss for 2014. It said rapidly sinking demand and enormous price pressures from competitors sent it into negative territory again.

Germany-based SMA announced Thursday it booked a net loss of 179.3 million euros ($196.7 million) last year, down from 66.9 million euros in the red in 2013.

A leading global specialist for photovoltaic system technology with a workforce of about 5,000 in 21 countries, SMA continued to

suffer from a tangible drop in demand on global markets

and increasing price pressures from competitors such as Sungrow and Omron.

The Germans said revenue dipped to 805.4 million euros in 2014, down from 932.5 million in the previous year.

Becoming leaner

Founded in 1981, SMA has specialized in producing inverters to convert DC to AC so that solar energy can be fed into energy grids. The technology allows people to build smart homes, and reduces operating costs for companies, by generating

cost-efficient solar power

.

Watch video 03:32

Renewable energy as an economic factor

But SMA hasn't been able to buck the trend in an industry suffering from overcapacities. SMA Chief Executive Pierre-Pascal Urbon said there would be no quick fix for the current problems, adding he expected between 30-60 million euros in operating losses in the current year.

He said fixed costs would be scaled back dramatically. Some 1,600 jobs will be cut, about a third of the workforce.

According to its own estimates, SMA accounts for 20 percent of global inverter production. It generates 40 percent of its revenues in Europe and the Americas each, with the remaining 20 percent coming from Asia.

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