January 27, 2015 / 8:36 AM / 4 years ago

UPDATE 2-SMA Solar to cut 1,600 jobs as European demand slides

* SMA Solar sees further decline in European demand

* Says will probably not return to profit this year

* To provide further details on Friday

* Still expects 2014 loss of up to 115 mln euros

* Shares hit all-time low, down 10.2 percent (Recasts, adds shares, trader quote)

FRANKFURT, Jan 27 (Reuters) - SMA Solar, Germany’s biggest solar company, is to cut about 1,600 jobs, or about one-third of its workforce, as it expects no relief in the short-term from an industry-wide demand slump, sending its shares to a record low.

SMA’s core European market has come under pressure over the past two years as governments have pared back support payments on which solar energy still depends.

In addition, Asian rivals have made inroads into SMA’s markets, putting pressure on equipment prices and profit margins.

“We expect to see high price pressure on the global photovoltaic market still in the coming years and a further decline in demand in Europe, particularly in Germany,” Chief Executive Pierre-Pascal Urbon said in a statement on Monday.

“By contrast, the non-European markets will develop positively,” he said.

The company, which in December had cut its full-year forecast for sales and profits for the second time within five months, said it would probably not return to profit in 2015.

“No more real shocks,” a Frankfurt-based trader said, referring to SMA’s string of profit warnings.

Shares in the company, whose inverters are needed to convert solar power into the energy grid, hit a record low and traded down 10.2 percent by 0828 GMT.

About 1,300 of the planned job cuts, which are to be completed by the end of June, will be in Germany, SMA said. The company had said last year it would cut 600 jobs around the world. At end December, SMA had 4,667 employees.

Urbon said SMA would discuss its plans with workers’ representatives in the coming weeks but warned that it could not rule out compulsory redundancies.

It said it would provide details of the planned restructuring and its expectations for 2015 at a capital markets day on Friday.

The company said it would be able to finance its restructuring without outside help thanks to a net cash position of about 220 million euros ($248 million).

It still expects to achieve 2014 sales of about 790 million euros and a loss of up to 115 million euros, excluding provisions for the planned job cuts.

It is due to publish its 2014 financial results on March 26.

$1 = 0.8882 euros Reporting by Christoph Steitz and Maria Sheahan; Editing by David Evans, Dominic Evans and Jane Merriman

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below