* Proposes 2012 div of 0.60 eur/shr vs 1.30 eur for 2011
* 2012 EBIT 102 mln eur vs 122 mln Rtrs poll avg
* 2012 sales 1.46 bln eur vs 1.47 bln Rtrs poll avg
* Shares indicated 2.5 percent lower
By Christoph Steitz
FRANKFURT, March 27 SMA Solar's
profits and dividend more than halved last year, hit by plunging
prices that have led to a wave of insolvencies in the solar
The world's largest maker of solar inverters - a key
component in solar installations needed to feed solar power into
the electricity grid - on Wednesday reported a 58-percent drop
in 2012 operating earnings to 102 million euros ($131 million).
Analysts had on average expected an operating profit of 122
Asian rivals that are selling cells and modules at cheaper
prices have caused a profit crunch in the solar industry,
forcing several Western solar players to drop out of the market.
"The competition risks have increased in comparison to the
previous year," SMA Solar said, adding sustained lower prices
from competitors could "severely impair" its business.
The crisis has even reached some Chinese players, with
Suntech's Wuxi unit in insolvency proceedings, and is
slowly reaching other parts of the industry, including SMA's
SMA has previously said that about 40 percent of the global
inverter market is held by 300-400 small players, of which more
than 200 are Asian.
The crisis has filtered through to SMA's operating margin,
which plummeted from about 27 percent in 2010 to 7 percent last
The group reiterated it could not rule out an operating loss
this year, as well as its forecast that sales were likely to
fall from 1.46 billion euros in 2012 to between 0.9 billion
euros and 1.3 billion euros this year.
Its shares were indicated 2.5 percent lower in pre-market
"It shouldn't be a surprise since the whole solar industry
is sick," a trader said.
The pressure on margins also saw German engineer Siemens
as well as manufacturing conglomerate Bosch
recently end their ventures in the solar industry.