Vestas Wind Systems A/S (CPH:VWS) swung to a profit in the first quarter of 2023 as revenues improved, mainly driven by increased turbine delivery volumes and growing activity in the services business.
The turnaround to a profit of EUR 16 million (USD 17.7m) from a deficit of EUR 765 million a year back was also helped by the sale of the converter business and lower warranty provisions, the Danish wind turbine manufacturer said today.
“Underlying pricing and profitability are not diluted by the lower Average Selling Price in the quarter, and we continue to strengthen industry discipline and maturity to return Vestas and the industry to profitability and prepare for future growth,” said CEO Henrik Andersen.
Earnings before interest and tax (EBIT) before special items came at EUR 40 million, reversing a loss from a year earlier, with EBIT margin standing at 1.4%, as compared to a negative 13.2%. At EUR 2.83 billion, revenues gained 14% year-on-year regardless of the EUR-45-million negative impact from foreign exchange rates transition effects. More than half of the total revenue was generated by orders in Europe, the Middle East and Africa (EMEA).
| Amounts in EUR million |
Q1 2023 |
Q1 2022 |
| Revenue |
2,829 |
2,485 |
| Gross profit |
188 |
22 |
| Operating profit (loss)/EBIT |
66 |
(894) |
| Pre-tax profit |
31 |
(889) |
| Profit (loss) for the period |
16 |
(765) |
| Free cash flow |
(1,081) |
(1,121) |
Wind turbine order intake in the quarter was 3,303 MW, up from 2,948 MW in the year-ago period. Wind turbine order backlog was worth EUR 19.7 billion, coming from 20.6 GW of deals, while the combined backlog of wind turbine orders and service agreements amounted to EUR 50.7 billion, marking an increase of EUR 1.8 billion from a year earlier.
Looking ahead, the company kept its full-year guidance, expecting revenues of EUR 14 billion-15.5 billion including service revenue. EBIT margin before special items is seen to range between a negative 2% to a positive 3%, with total investments for the year forecast to be around EUR 1 billion.
“The wind industry remains challenged by political uncertainty, slow permitting processes, and high inflation, which we expect to continue throughout 2023, but we are on track for our 2023 financial outlook,” the CEO said.
(EUR 1.0 = USD 1.105)
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Vestas wind turbines. Image by: Vestas Wind Systems @LinkedIn.
