SMA Solar Technology AG (S92), Germany’s biggest solar-energy company by market value, slumped to its lowest value since April 2009 after it predicted declining sales and earnings because of subsidy cuts.
The stock slid as much as 9.1 percent to 34.18 euros after the Niestetal-based company said sales will drop to 1.2 billion euros ($1.6 billion) to 1.5 billion euros this year, with an earnings margin of 5 percent to 10 percent.
Suppliers of solar-power equipment, including SMA Solar and the U.S.’s Power-One Inc., saw profit squeezed last year as subsidy cuts and lower prices weighed on sales. SMA, the biggest maker of inverters that turn power from solar panels into a current for the grid, on Jan. 13 posted preliminary 2011 revenue of about 1.7 billion euros and earnings before interest and tax of 240 million euros, missing the 259 million-euro average estimate of 15 analysts surveyed by Bloomberg.
SMA’s board “believes that the radical reduction in subsidies, particularly in Germany, will lead to lower demand for medium to large-scale photovoltaic plants,” SMA Solar said in a statement. “At the moment, it cannot be predicted whether Asian and American markets can fully compensate for the decline.”
Germany, the biggest market for solar energy when it comes to installed capacity, plans to curb aid for the industry by as much as 29 percent this month and make additional monthly reductions starting in May to limit installations that reached a record 7.5 gigawatts last year. Plants larger than 10 megawatts won’t get support after July 1.
SMA was down 1.85 euros, or 4.9 percent, at 35.765 euros as of 3:02 p.m. local time.
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