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Wind giant Vestas generates big profits

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Wind giant Vestas generates big profits
Photo: Henning Bagger/Scanpix
14:31 CET+01:00
Company shares soar after Vestas reports 26 percent revenue growth.
The world's leading wind turbine maker, Danish group Vestas Wind Systems, reported Friday it had swung into profit and now sees a brighter outlook for 2014.
 
Emerging from more than two years of losses under the guidance of new chief executive Anders Runevad, the firm said it is enjoying strong demand.
 
"The demand for renewable energy continues to be strong in both mature and emerging markets and amongst renewable energy sources, wind energy is generally regarded as the most competitive," the company said in a statement.
 
The group said it expects the annual operating margin before special items to be between seven and eight percent this year, compared with a six percent estimate in August, when it was raised from five percent.
 
Revenue is now seen at 6.4 to seven billion euros ($7.9 to $8.9 billion, 47 billion to 52 billion kroner) this year, compared with a six billion euro target in August.
 
Vestas reported a net profit of 136 million euros in the third quarter, up from a loss of 86 million euros in the same period a year ago. Revenue grew 26 percent to 1.813 billion euros.
 
"The third quarter of 2014 continued the trend with improvements in several operational areas and thus highlights that execution remains on track for our strategy," Runevad said in a statement.
 
Runevad took the helm in August last year after the company had posted nine quarterly losses in a row.
 
Vestas was hit badly as the financial crisis left the industry with spare capacity. Between 2012 and 2013 it went from having 22,926 employees to 15,497. At the end of the third quarter the number stood at 19,324.
 
Sydbank analyst Jacob Pedersen highlighted that the cost base had improved and that profit margins were higher than expected.
 
"This is a very, very strong result," he told Danish news agency Ritzau.
 
Shares in Vestas had soared by 11.5 percent in midday trading on the Copenhagen bourse, where the main index was 0.52 percent higher.
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