Vestas sees favourable winds despite low oil prices

Vestas sees favourable winds despite low oil prices
Vesta's order intake rose by 41 percent in 2015. Photo: Claus Fisker/Scanpix
Danish wind turbine maker Vestas Wind Systems on Tuesday posted a full-year profit for 2015 that beat forecasts and despite low global oil prices expects revenues to continue rising this year.
“The wind power industry has matured in recent years and we are now seen as one of the main contributors to a more sustainable power generation footprint,” chairman Bert Nordberg said in a statement.
Net profit for the year rose to €685 million ($766 million) from €392 million last year, beating Bloomberg analyst consensus of €637 million.
Revenue grew 22 percent to a record €8.42 billion — and is expected to reach at least €9 billion this year, which would be an increase of nearly 7 percent.
Order intake rose by 41 percent last year to €8.2 billion, and the order book stands at just over one year of work.
“We have seen good activity levels across all regions,” chief executive Anders Runevad said, noting that Vestas' profitable service business grew 20 percent.
The board recommended raising the dividend by 75 percent to 6.82 kroner (€1.34, $1.50).
Runevad took the helm in August 2013 after the company had posted nine quarterly losses in a row.
The Danish company had to cut its workforce by almost a third as the financial crisis prompted governments to cut subsidies for renewable energy.
“Vestas is earning more than expected from its operations,” Sydbank analyst Jacob Pedersen told Danish news agency Ritzau, as the profit margin before interest and taxes widened to 10.2 percent from 8.1 percent.
“They have cut costs significantly,” said Michael Friis Jørgensen, an analyst at Danish financial services group Alm. Brand Markets.
If oil prices remain at their low levels it could become a problem for the company in the future as it would make wind power less competitive and hit orders, and global economic uncertainty could reduce investor appetite in the sector, he cautioned.
But an impact the company's results was unlikely before 2017, he said.
Shares in Vestas were up 6.5 percent in late morning trading on the Copenhagen bourse, where the main index was 1.03 percent lower.

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