August 9, 2018 / 11:28 AM / 4 months ago

UPDATE 1-SMA Solar shares plunge to 1-yr low on China woes

* Lowers expectation for size of addressable market

* Keeps 2018 forecast for sales, EBITDA

* Shares fall to lowest level since late-July 2017 (Recasts, adds shares, context)

FRANKFURT/DUESSELDORF, Aug 9 (Reuters) - SMA Solar on Thursday warned that falling support for solar energy in top market China would curb growth in the global inverter market, sending shares in Germany’s largest solar company to their lowest level in more than a year.

China in June announced changes to the subsidy scheme that helped it to become the world’s largest market for photovoltaic (PV) equipment, including a cut to feed-in tariffs which serve as an incentive for investors.

“The reduction in PV expansion targets and feed-in tariffs in China, which completely surprised all market participants, will impact global demand,” SMA Chief Executive Pierre-Pascal Urbon said.

The company, whose inverters are needed to feed solar power into the grid, now expects SMA’s addressable market to rise by 7 percent a year to 7.6 billion euros ($8.8 billion) by 2020, having previously expected a market size of 9.2 billion euros.

Shares in the company fell as much as 13.3 percent to 30.50 euros apiece, their lowest level since the end of July 2017.

The company said it still expected 2018 sales of 0.9-1 billion euros and earnings before interest, tax, depreciation and amortisation (EBITDA) of 90-110 million, which it says was based on the assumption that no PV projects would be postponed to a greater extent in light of falling prices. (Reporting by Christoph Steitz and Anneli Palmen; Editing by Maria Sheahan and Kirsten Donovan)

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