SMA Solar Technology Ag Expands Financial Maneuvering Room To Profit From Consolidation In The Solar Industry
To leverage optimal benefits from the current consolidation in the solar industry, SMA Solar Technology AG (SMA/FWB: S92) has entered into a long-term credit agreement amounting to €100 million with Commerzbank, Deutsche Bank and Hessische Landesbank. SMA is planning to utilize the resulting greater maneuvering room in particular for further expanding its service business. With an equity ratio of around 50 percent and net cash of more than €320 million at the end of the first quarter of 2016, SMA is among the most financially sound solar companies in the world.
“Due to insolvencies and financially stricken project developers with a portfolio of service and maintenance contracts, SMA currently has some interesting business opportunities, particularly in the U.S. and Europe, which is why we are planning to use a portion of our cash reserve to expand our service business,” explained SMA Chief Executive Officer Pierre-Pascal Urbon. “With the consortium loan, SMA has secured the financing of current assets over the long term and is profiting from the currently low interest rate level.” At the end of the first quarter of 2016, SMA has net cash of €323 million and an equity ratio of 49.9 percent. The good credit rating is highly relevant to customers particularly in project and service business. As a result, SMA can give investors and PV system operators the long-term certainty that many smaller, non-listed companies in the industry cannot provide.
“Since the inverter is a central component in any PV system, many owners and PV system operators regard SMA as the natural partner of choice for operations and maintenance services,” said Chuck Smith, Executive Vice President of SMA’s Service business unit. SMA has a global service infrastructure with more than 400 highly qualified service professionals and has concluded contracts for operations and maintenance (O&M) services for PV power plants with outputs of 1.4 GW. According to a study conducted by GTM Research, this makes SMA one of the four major providers in the field of O&M maintenance services. The current business environment offers the perfect conditions for further expanding this position.