* Q2 EBIT loss 14.8 mln eur vs 5.6 mln in Rtrs poll
* Net loss 10 million euros vs f'cast 3.3 mln loss
* Sticks to full-year outlook
* Shares trade up 1.6 percent
(Recasts, adds analyst, details about inverter sector)
By Christoph Steitz
FRANKFURT, Aug 8 Plunging prices for solar
equipment caused a bigger than expected loss at SMA Solar
, putting more pressure on Germany's top sector player
to escape a crisis that has rattled most parts of the industry.
A glut of cells and panels as well as tough competition from
Asia has led to a pricing squeeze in the solar industry over the
past four years, pushing many former heavyweights into
insolvency including Q-Cells, Solon and
SMA Solar - the world's largest maker of solar inverters, a
key component needed to feed solar electricity into the power
grid - was long protected from the problems as production of
inverters requires deeper technological expertise than that of
panels or cells.
But an influx of Asian competitors has now caused prices for
inverters to plunge, narrowing SMA Solar's operating margin to 7
percent last year from about 27 percent in 2010.
The company slumped to a loss before interest and tax (EBIT)
of 14.8 million euros ($19.7 million) in the second quarter from
a profit of 40.8 million a year earlier.
The loss was wider than the 5.6 million euros average
forecast in a Reuters poll of banks and brokerages. Its net loss
reached 10 million euros in the quarter, wider than the 3.3
million average forecast.
"Overall, SMA Solar reported a weak set of Q2 results on the
back of continued tough market circumstances in Europe,
increased competition, a shift in geographical demand, which has
all led to significant price pressure," said Serena Zuidema,
analyst at Dutch bank Kempen & Co.
Shares fell as much as 6.7 percent in early trade but traded
up 1.6 percent at 0855 GMT, as traders said it was unlikely the
group would follow the same fate as panel-making peers such as
SolarWorld, which late on Wednesday struck a deal with
shareholders about a wide-ranging restructuring.
The global solar inverter market is forecast to shrink 5
percent to $6.7 billion this year, according to research firm
IHS, while the European market, where governments are scaling
back solar power subsidies, will contract to 32 percent of
inverter shipments, from 82 percent in 2010.
"The slump in demand in Europe forces additional
cost-cutting measures and an adjustment to the personnel
structures," SMA Solar Chief Executive Pierre-Pascal Urbon said.
Last month, the group said it would cut about 14 percent of
its 5,800 staff in an attempt to lower costs and improve
SMA Solar kept its outlook for the current year for sales to
reach between 0.9 and 1.3 billion euros, while confirming it
cannot rule out a loss.
($1 = 0.7508 euros)
(Editing by David Cowell and David Holmes)