Vestas shares jump after raised revenue forecast

Shares in Danish wind turbine maker Vestas Wind Systems rose on Thursday after the company raised its annual revenue forecast and posted strong quarterly results.

Vestas shares jump after raised revenue forecast
Vestas CEO Anders Runevad. Photo: Thomas Lekfeldt/Scanpix
“Our colleagues have executed well on a high activity level, which along with a favourable mix of projects contributed to Vestas achieving extremely solid results on revenue, EBIT margin, net profit, and free cash flow,” chief executive Anders Runevad said in a statement.
Order intake had been “in line with expectations,” he said.
Revenue was expected to reach at least €9.5 billion ($10.7 billion) this year rather than a previous estimate of at least nine billion euros, according to the group.
The EBIT (earnings before interest and taxes) margin would be at least 12.5 percent this year, rather than 11 percent.
Net profit in the second quarter more than doubled to €278 million from €125 million in the same period a year ago, as revenue gained 46 percent to 2.56 billion euros.
The US government's decision to extend wind production tax credits, or PTCs, means “Vestas' team in the US will be extremely busy until December 31st, because there is a high level of activity in the US market,” Runevad told Danish news agency Ritzau.
The group also said it would buy back shares worth 2.98 billion kroner (€400 million, $453 million) starting on Thursday and ending on December 30th.
“It is a very strong set of results, where Vestas blows away all expectations and delivers better than expected on all parameters,” Alm. Brand analyst Michael Friis Jorgensen told Ritzau.
Shares in Vestas were 9.3 percent higher in mid-morning trading on the Copenhagen bourse, where the main index was 0.7 percent higher.

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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.