Investing.com -- SolarEdge Technologies shares rose 2% in premarket trading Wednesday after the company announced it will close its Energy Storage division as part of a strategy to focus on its core solar operations.
The decision includes cutting approximately 500 jobs, primarily in South Korea, and selling off assets related to the storage business, including manufacturing facilities for battery cells and packs.
SolarEdge (NASDAQ:SEDG) estimates quarterly operating expense savings of about $7.5 million from the closure, with full savings expected by the second half of 2025.
Importantly, this move will not impact the company's sale of batteries for residential and commercial solar markets.
Ronen Faier, SolarEdge's interim CEO, said the decision was reached after evaluating the company's portfolio, industry trends, and the competitive landscape.
"The measures also represent continued execution of two of our main priorities: financial stability through cost reduction, return to cash flow positivity and profitability; and focus on our core business lines of solar, PV-attached storage and energy management capabilities," Faier stated.
The closure aligns with SolarEdge's effort to optimize its business as it navigates a competitive renewable energy landscape. The company expressed gratitude to employees in the Energy Storage division for their contributions in building the business.
This strategic pivot comes amid broader industry pressures and represents a clear signal of SolarEdge's intent to consolidate its resources and refine its market focus.