SMA Solar has once again slashed its annual targets and announced mass redundancies under the continuing pressure of cheap Chinese competition.

The solar technology company announced on Thursday night that up to 1,100 of a total of over 4,000 jobs would be cut. Two thirds of these are jobs in Germany. "The solar industry is undergoing change," said SMA CFO Barbara Gregor. "We will adjust the cost base to the reduced sales volume and the changed demand dynamics."

The company had already held out the prospect of a cost-cutting program and possible redundancies last month. Nevertheless, the shares plummeted on Thursday. They plummeted by up to 21 percent and, at 10.95 euros, were as cheap as they had last been ten years ago. "The competitive pressure from China is brutal," said one stockbroker. "SMA is fighting for survival."

PROFIT SLUMP AND GLOOMY OUTLOOK

In the first nine months of the current year, SMA sales shrank by just under 21% to €1.06 billion, according to the figures. Operating profit plummeted by more than 70 percent to 83.5 million euros. The reasons for this were the continuing weakness in the Home Solutions and Commercial & Industrial Solutions segments as well as increased costs.

SMA has therefore lowered its sales target for the year as a whole to €1.45 to 1.50 billion from €1.55 to 1.70 billion. The company is aiming for an operating result of between minus 20 and plus 20 million euros instead of plus 80 and plus 130 million euros. Due to the sluggish business with private and corporate customers, it had already reduced its forecasts in June. At that time, the SMA share recorded its biggest daily loss in twelve years with a drop of around 31 percent.

(Report by Hakan Ersen; with the assistance of Katharina Loesche, edited by Myria Mildenberger. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)