Company Solaredge Engaged in solar energy, it surpassed analysts’ forecasts in revenue but posted a lower-than-expected profit in the fourth quarter, while providing a high revenue forecast for the first quarter. The company, managed by Zvi Lando, a provider of systems for monitoring and optimizing solar energy and solutions in the fields of energy storage, recorded revenue of $ 552 million in the quarter, a growth of 54% from the corresponding quarter, ending 2021 with growth of 34.6% and revenue of $ 1.96 billion. This is despite the component crisis and the increase in transportation costs, which hurt profit rates but not revenue.
GAAP net income was $ 41 million for the quarter and $ 169 million in 2021, and on a non-GAAP basis, after deducting various accounting items, earnings were $ 62.8 million, which is $ 1.1 per share, and for the full year was $ 273 million. An increase of 21.6% from 2020.
In the first quarter, analysts are expected to be 10% higher than expected, $ 615-645 million, but gross profit will play from 32.5% in the corresponding quarter to 28% -30%.
Demand for solar energy and component shortages
Ronen Pierre, CFO, explains that “it was a positive but complex year. The positive comes from the direction of demand, and the complexity of the world of production and components. We estimate that 2022 will be similar to 2021, perhaps with some acceleration, “he said. Towards, and in the US people want to be less dependent on an unstable network due to fires and storms and turn to solar. All this produces very strong demand. On the other hand, there is a component shortage: very difficult to obtain electronic components, we are in relatively good condition. “We give up deals, but it costs us shipping costs 5-20 times greater than before the crisis. The combination of things leads to a very large increase in revenues, and a temporary erosion mainly in the profit margins.”
Relatively moderate decline for technology companies
Solaredge generated about $ 214 million from operations in 2021 and at the end of the year had $ 1.18 billion in cash, compared to a long-term debt of $ 622 million. The company is valued at $ 13.8 billion. Although its share fell by about 29% from the peak of 2021, this is a moderate decline compared to other Israeli technology companies. “We were in a world of high prices,” Pierre says. “There are trends and we are not escaping the declines in the market, but in the end there is a separation, Solaredge generated $ 214 million in cash this year and its profit $ 273 million. We saw companies selling 70 million, losing 100 million and with a valuation of half of us. Healthy, growing and profitable, so there is less reduction in pricing compared to companies that are mainly based on a dream. “
He says the company has great potential going forward: today solar is 6% of the world’s energy production and in order to reach 0 emissions in 2050 it is required to reach 40%. “The growth potential and profitability of the company is still ahead of us. In the end it will also translate into the share price,” he says. He says there is a new level of demand that the company sees, and Solaredge is also expected to start operating the Sela 2 plant in Korea soon (the Sela 1 plant was recently established in Tziporit and both are named after Guy Sela, the company’s founder and CEO who died in 2019).