NKT A/S (CPH:NKT), the Danish power cables supplier that serves both the offshore and onshore wind segments, anticipates to invest around EUR 1 billion (USD 1.08bn) in additional high-voltage production and installation capabilities and capacity in the period 2023-2026.
On Wednesday, the company gave more details about its previously announced investment programme through which it seeks to prepare for future growth in the high-voltage power cable market. It said it plans a significant expansion of the Karlskrona production site in Sweden, including the construction of a new factory with a third 200-metre extrusion tower. This will turn the facility into the world’s largest high-voltage offshore cable production site, according to NKT.
In addition, the company will add a new vessel with record-high power cable-laying capacity. The new assets are seen to become operational from 2027 onwards.
“Power cables are key enablers of the transition to renewable energy and current high-voltage production and installation capacity is not sufficient to meet the increasing demand in the market,” NKT’s president and CEO Claes Westerlind stressed in a press statement.
NKT mentioned that its high-voltage order backlog amounted to EUR 7 billion at the end of March 2023, up from EUR 4.7 billion at end-2022 and EUR 2.9 billion at end-2021. For the period 2023-2024, NKT estimates the value of project awards in its addressable high-voltage power cable market at about EUR 8 billion on average per year, if not even significantly larger.
As a result of the improved high-voltage order backlog visibility and quality and in view of the investment plan, the company today upgraded its medium-term financial ambitions. Details are available in the table below.
|NKT medium-term ambitions
|Organic growth (CAGR)
||Above 12% from 2021-2025
||Above 12% from 2021-2028
||Above EUR 300m in 2025; Above EUR 550m in 2028
|Operational EBITDA margin
||Around 12-16% by 2025
||In the upper half of the previously projected range
||Above 12% by 2025
||Above 15% in 2025;
Above 20% in 2028
(EUR 1.0 = USD 1.078)
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