Nordex's Q1 profit falls to EUR 7.1m

2.5-MW Nordex turbine. Source: Nordex SE

German wind turbine maker Nordex (ETR:NDX1) today reported a net profit of EUR 7.1 million (USD 7.7m) for the first quarter of 2017, down by 72.2% on the year, while sales inched up by 1.8%.

The company said it performed in line with expectations. More sales were generated in America, following the merger with Acciona Windpower in April 2016.

Capital spending in the period more than doubled to EUR 35.7 million because of the purchase of plant and equipment for new core components. Nordex said it continued to invest in new competitive products. “Our medium-term goal is to improve market share and profitability. For this reason, we are stepping up spending on our technology as well as lowering production costs,” said CEO Jose Luis Blanco.

All in EUR million, unless specified	Q1 2017	Y/Y
Sales	648.4	+1.8%
Total revenue	663.6	+3.7%
EBITDA	51.2	-13.4%
EBITDA margin (in %)	7.9	-1.4 pp
EBIT	17.1	-61.9%
Consolidated net profit	7.1	-72.2%

The service business grew substantially in the quarter with revenues rising by 57% to EUR 74 million. It helped raise Nordex’s gross margin to 29%.

Orders, however, declined to EUR 333 million from EUR 541 million in the same three months of 2016, which the company attributed the transition to auctions in core European markets. Nordex’s order backlog arrived at EUR 3.8 billion so it is confirming its full-year guidance for sales of EUR 3.1 billion-3.3 billion, and an EBITDA margin of between 7.8% and 8.2%.

In the first quarter the working capital ratio went up to 8.4% as the group accumulated inventories in preparation for rising installation volumes. In the second half of the year the ratio is seen to decrease to 5%-7% due to prepayments for new orders.

(EUR 1 = USD 1.09)

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