Goldwind posts lower 2019 profit but strong revenue

Chinese wind turbine maker Xinjiang Goldwind Science & Technology (HKG:2208) reported a 32% lower net profit for 2019 as certain costs increased and margins contracted.

The company’s profit for the year arrived at CNY 2.23 billion (USD 314.3m/EUR 286.7m). It guided for a 250% to 300% increase in net profits attributable to owners of the company in the first quarter of 2020, which would bring the result to CNY 800.1 million-914.4 million.

“With subsidy phase-out and the arrival of grid parity and auction, as well as the clarification of ecological ‘red line’ and the gradual standardization of forest land use, the development of wind power has ushered in an era of both opportunities and challenges,” Goldwind said in its annual report, released on Tuesday. In this changed environment, it managed to record annual revenues of CNY 37.9 billion, up by 32% year-on-year.

Selling and distribution costs rose by 48% to CNY 2.8 billion due to higher turbine sales, product warranty provisions, bidding service fees and freight costs, among others. Other expenses jumped to CNY 611.5 million from CNY 196 million because of higher bank fees, exchange losses and intangible asset impairment losses.

According to BloombergNEF, Goldwind installed 8.25 GW in 2019 globally for a market share of 14%. At the end of the year, external orders stood at 20.28 GW, of which 14.45 GW with signed contracts.

The company’s board is recommending a final dividend of CNY 1.6 per 10 shares, which is subject to approval by the firm’s shareholders.

(CNY 10 = USD 1.41/EUR 1.29)

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