US wind industry supplier Broadwind Energy Inc (NASDAQ:BWEN) on Monday reported a net loss from continuing operations of roughly USD 688,000 (EUR 582,000) on flat revenues of USD 43.4 million for the second quarter of 2017.
A year earlier the company was at break even. The difference comes from the fact that it registered additional amortization expenses in Q2 2017 following the acquisition of Red Wolf Company LLC, a fabricator, kitter and assembler of industrial systems for the global gas turbine market.
Non-GAAP adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were also essentially flat at USD 2 million.
In the Towers and Weldments segment, which manufactures wind turbine towers among other products, revenue decreased by about 10% to USD 34.4 million because of lower sales volumes. This was partially offset by higher pass-through material content. Sales in the Gearing segment rose to USD 6.1 million from USD 5.4 million despite lower sales to wind customers.
“We had a strong first half and our second quarter results were in line with expectations. Despite lower tower volumes, we produced consistently and reliably and delivered solid segment profits on fewer, more complex towers,” said Broadwind CEO Stephanie Kushner.
For the first half of 2017, the company posted a net profit from continuing operations of USD 5.8 million versus a loss of about USD 316,000 a year back. The latest result includes a USD-5.1-million income tax benefit coming from the partial release of a tax valuation allowance related to the Red Wolf acquisition. Revenue went up to USD 99.4 million from USD 90.1 million, also due to the purchase of Red Wolf plus higher sales in the Towers and Weldments segment.
Broadwind booked just USD 17.6 million of net new orders in the second quarter compared to USD 176.2 million in Q2 2016. The company noted that in April-June customers used inventories built to support the terms of the production tax credit (PTC) qualification period, which led to weaker demand for wind towers.
At end-June, total backlog was USD 155.9 million, compared to USD 218.9 million a year earlier.
THIRD-QUARTER FORECAST
Broadwind expects a further reduction in tower volumes in July-September 2017, though this should be offset by other segments. Total revenues are seen at around USD 30 million and EBITDA at USD 1 million.
“We are working with our customers to support a reduction in their component inventories during the next few quarters, and expect to see recovery in their offtake beginning in mid-2018. All indications point to a strong market through at least 2020,” Kushner stated.
(USD 1.0 = EUR 0.846)
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Wind turbine. Author: PSNH. License: Creative Commons, Attribution-NoDerivs 2.0 Generic
