* Still sees decline in 2013 sales, cannot rule out loss
* Q3 sales 363 mln euros, vs 347 mln forecast
* Q3 EBIT 32.3 mln euros, vs 30 mln forecast
* Shares up 3.2 percent
(Recasts, adds detail on trade war, analyst comment)
By Christoph Steitz
FRANKFURT, Nov 8 SMA Solar, Germany's
No. 1 solar group, said it was to cut costs further given that
margins may evaporate next year because of falling subsidies for
SMA, the world's largest maker of solar inverters - a key
component in solar installations, said on Thursday it would
further cut the price of inverters by slashing production costs
and purchasing prices.
Long hailed as one of the industry's last investor darlings,
the group finally succumbed in mid-October to a crisis caused by
oversupply, growing competition from Asia, and lower subsidies,
saying it could post a loss and would cut 450 jobs.
On Wednesday, it repeated it could not rule out a loss next
year due to falling subsidies in key markets on which the
industry depends while solar power costs more than conventional
Germany and Italy, the two largest markets for solar
products, were both expected to halve next year, while other
markets, such as China, could double, according to data from
industry association EPIA.
SMA chief executive Pierre-Pascal Urbon told Reuters in
September China had been largely sealed off to western solar
companies, making it impossible for the group to set up a
profitable business in the world's No.2 economy.
"With much (...) demand coming from areas outside SMA's
traditional customer base, competition will be more intense,
pricing lower and costs higher," Citi analyst Jason Channell
The solar industry has been gripped by a trade war, in which
western companies says Chinese peers have practiced price
dumping and receiving illegal state subsidies, driving European
peers out of business.
SMA has seen margins dwindle over the past three years, from
about 27 percent in 2010 to an expected 8-10 percent this year.
That pressure on margins saw German engineer Siemens
pull the plug on solar activities which, it said, led
to a 250 million euros ($319 million) hit in its fiscal fourth
On Thursday, the European Union launched an investigation
into alleged state subsidies for Chinese solar panel makers,
after China earlier this week lodged a complaint with the World
SMA shares were up 2.4 percent at 1045 GMT, with traders
pointing to a small relief rally following slightly better than
expected third-quarter operating profit, that reached 32.3
million euros, compared with a forecast for 30 million in a
Since mid-October, when SMA said it could post a loss next
year, its shares have lost more than a third of their value.
Along with conglomerates such as French group Schneider
Electric, SMA's main competitors include U.S. rival
Power One Inc, unlisted players such as Fronius and
Kaco from Germany, and a myriad of small Asian players.
($1 = 0.7840 euro)
(Editing by Dan Lalor)