US composite wind blades maker TPI Composites Inc (NASDAQ:TPIC) registered a solid net loss reduction in the first quarter of 2020 and only lower production levels in China prevented it from reporting a positive bottom line result.
The company posted a net loss of USD 0.5 million (EUR 0.46m) for January-March 2020 compared to a loss of USD 12.1 million a year back. It said that its latest result had been adversely impacted by about USD 9 million, primarily due to the COVID-19 pandemic affecting operations in China.
The coronavirus situation also had a negative impact of some USD 11 million on the company’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA). Net sales climbed by 19% on the year, with net sales of wind blades increasing by 21.4% primarily thanks to a 10.8% rise in the number of units produced and also because the average sales price grew.
“Despite the challenging environment driven by COVID-19, TPI delivered better than planned results for the first quarter growing net sales by 19%,” commented Bill Siwek, president of TPI.
More details about the company’s financial performance are available below.
| In USD million, except percentages |
Q1 2020 |
Q1 2019 |
| Net sales |
356.6 |
299.8 |
| - of which wind blade sales |
336.3 |
277 |
| EBITDA (loss) |
(2.7) |
(4.1) |
| Adj. EBITDA (loss) |
1.3 |
2.9 |
| Adj. EBITDA margin |
0.4% |
1% |
| Net profit (loss) |
(0.5) |
(12.1) |
Siwek noted that the company’s facilities in China have recovered quickly from the first-quarter shutdown. In India the situation aligns with TPI’s internal expectations and in Turkey its plants are currently operating at full capacity.
As previously announced, in the US state of Iowa TPI paused production in late April to conduct a deep clean of the facility and test for COVID-19 all of its associates in Newton. According to Siwek, the plant has restarted production at a limited production level on May 6.
“As of today, Mexico remains our biggest challenge. We are currently operating our Matamoros facility at approximately 50% capacity and may be required to continue to operate at a reduced capacity through May 30, 2020 when the federal government has indicated the “sanitary emergency” in Mexico is expected to be lifted and all of our Juarez facilities are now temporarily shut down due to the “sanitary emergency” and lack of clarity around what constitutes an “essential” business,” Siwek stated.
Late last month, the company withdrew its financial guidance for 2020 due to the COVID-19 pandemic and on Thursday reiterated that it still cannot accurately estimate the full duration and financial magnitude of the impact of the health crisis.
(USD 1.0 = EUR 0.923)
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Image source: Wood Group
