Senvion confident on full-year guidance after weak H1

German wind turbine manufacturer Senvion SA (ETR:SEN) today confirmed its 2018 guidance, in spite of a weaker showing in the first half of the year which was attributed to a skewed installation schedule towards the second half.

The company said it is confident of meeting its full-year guidance of between EUR 1.8 billion (USD 2.1bn) and EUR 1.9 billion in revenues and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 5%–6.5% on the basis of 100% order coverage at the lower end of the revenue forecast.

In the first half, Senvion's onshore order intake grew 26% year-over-year to EUR 797 million, driven by new markets such as India and Australia. The company achieved 432 MW order intake in India, 226 MW in Australia and 97 MW in Argentina.

"We have been highly successful in new markets, helping us build visibility of 20-40% growth in revenues by 2019," said acting chief executive and chief financial officer Manav Sharma.

In the first half, Senvion's revenues fell 43.8% to EUR 466 million due to the skewed installation profile and also to delays in installations in several projects in new regions like Chile and Australia. As a result, adjusted EBITDA dropped to EUR 13.3 million from EUR 61.8 million a year ago and adjusted EBITDA margin was down to 2.9% from 7.4%.

The company booked a net loss of EUR 50.1 million, compared to a loss of EUR 91.9 million in the prior-year period, with the change reflecting less restructuring expenses in the reporting period. Senvion said that having completed its Move Forward programme last year, it has now launched the second phase of the programme and has already further reduced operating costs by 5% in the first half of 2018.

Sharma is optimistic that annual demand for wind turbines could double within a decade, but adds that in the short-term, the industry needs to adapt to the new pricing levels.

The manufacturer ended the period with total order book of EUR 5.4 billion, with the onshore firm order book rising 32% year-over-year to EUR 2.1 billion and the service order book expanding 8% to EUR 2.7 billion.

(EUR 1 = USD 1.139)

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