Vestas raises guidance as headwinds subside

Wind turbine maker posted strong quarterly earnings on Wednesday as it continued to emerge from a crisis in which it shed thousands of jobs.

Vestas raises guidance as headwinds subside
Photo: Vestas Wind Systems
Vestas Wind Systems raised its profits guidance on Wednesday on the strength of its quarterly earnings.
The Aarhus-based company said it believes this year's margin on earnings before interest and taxes, before special items, would be at least six percent, instead of five percent forecast previously.
The upgrade was based on "the improved cost base and the expected delivery plan for the second half of 2014," it said.
The company, the world's biggest wind turbine maker, reported its last annual profit in 2010, falling into the red after an ill-timed expansion plan and tough competition forced it to slash its workforce by almost a third.
"With another solid quarter showing improvements in most areas, we remain focused on executing on our strategy," chief executive Anders Runevad said in a statement.
Vestas made a net profit of 702 million kroner (94 million euros, $125 million) in the second quarter compared with a 62 million euro loss in the same period a year ago, as revenue rose 13 percent to 1.341 billion euros.
The group said the European market was "still characterised by low activity in southern Europe which is balanced by growth in some northern and eastern European markets," while activity in the US was high.
"They have become better and more efficient at producing wind turbines," by lowering production costs while maintaining quality, Sydbank analyst Jacob Pedersen told Danish news agency Ritzau.
Shares in Vestas were 1.2 percent lower in midday trading on the Copenhagen bourse, where the benchmark index was flat.

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Danish wind turbine giant Vestas looking offshore after strong results

Vestas, the global leader in wind turbines, posted stronger annual results Wednesday and said it was looking to expand crucial offshore operations with a giant new model.

Danish wind turbine giant Vestas looking offshore after strong results
Photo: Henning Bagger/Ritzau Scanpix

The Danish company reported a 10 percent rise in net profit to 771 million euros ($933 million) for 2020, even though its supply chain had been affected by the coronavirus pandemic.

Sales jumped 22 percent to a record 14.82 billion euros, a statement said.

One disappointing number was for orders however, which declined by eight percent to 12.7 billion euros in a sector where competition is stiff and global investment is growing.

Vestas has long been a leader in onshore turbines and must now catch up with offshore rivals such as the German/Spanish group Siemens Gamesa or the US multinational General Electric (GE).

“To lead the expansion of wind energy into becoming the dominant energy source, it is crucial for Vestas to become a leader in offshore wind,” the statement quoted president and chief executive Henrik Andersen as saying.

In October, Vestas spent 700 million euros to gain full control of the sea-based unit it launched in 2014 with the Japanese group Mitsubishi Heavy Industries.

This year, Andersen said the Danish company's focus “will be to fully integrate offshore (operations) and address executional challenges”.

Vestas unveiled a 15-megawatt offshore turbine design that it expects to begin installing in 2024.

For 2021, Vestas is targeting sales of 16-17 billion euros, which would represent a gain of eight to 15 percent.

In midday trading on the Copenhagen stock exchange, Vestas shares showed a drop of 3.9 percent to 1,227.50 kroner, while the OMX Nordic 40 index on which it is listed was 0.2-percent lower overall.