Vestas Profit Beats Forecast

Posted by George Backwell
Wednesday, August 20, 2014
Offshore windfarm: Photo credit Hans Hillewaert

Danish wind turbine maker Vestas Wind Systems posted much higher than expected second-quarter earnings and slightly increased its guidance for the full year, signaling its turnaround from the brink of collapse has taken hold.

* Q2 earnings before special items 104 mln eur vs f'cast 63 mln
* Orders rise to 1,932 megawatt vs forecast 1,648
* Sees op profit margin pre special items at minimum 6 pct
* Shares up 2.7 pct, hit two-month high

Its shares opened up more than 5 percent on Wednesday, touching a two-month high of 290 Danish crowns, and were trading 2.7 percent higher at 282.6 crowns by 0715 GMT.

Vestas said earnings before special items jumped to 104 million euros ($138 million) from 12 million a year ago, compared to analysts' expectations of 63 million.

Orders rose to 1,932 megawatt (MW) against a forecast 1,648.

"The result is a lot better than expected and it is due to a gross margin of 19 percent," said Jacob Pedersen, analyst at Sydbank. "A gross margin of 19 is unusual for Vestas ... This is exactly what we want to see from Vestas."

The group said it now expects its operating profit margin before special items to increase to a minimum of 6 percent from its previous guidance of at least 5 percent and from 3.5 percent in 2013.

Revenue, which reached 6.1 billion euros in 2013, is still expected to be at least 6 billion euros in 2014, the company said.

Vestas has had to shed a quarter of its workforce, closed plants and sold unprofitable businesses in a far-reaching restructuring since 2011, after overcapacity and cut-throat competition hammered many renewable energy companies.

After a five-fold increase in 2013, Vestas shares have risen more than 70 percent this year.

By Shida Chayesteh

Maritime Reporter September 2014 Digital Edition
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