TPI Composites reports strong Q2 growth, extends Nordex deal

US-based composite wind blades maker TPI Composites Inc (NASDAQ:TPIC) on Wednesday reported substantially higher results for the second quarter of 2016 compared with a year ago, driven by increased production.

The company also said it has extended and expanded its long-term agreement with Nordex SE (ETR:NDX1) to continue to supply the German wind turbine maker with blades from its Izmir, Turkey plant through 2020. TPI is also increasing annual volume thanks to improvements in cycle time and productivity.

Nordex uses the blades for projects in Turkey, as well as for export to the greater European region, Africa and the Middle East.

TPI, which completed an initial public offering (IPO) in July, reported a second-quarter net profit of USD 11.6 million (EUR 10.5m), up from USD 4.1 million a year back. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose to USD 20.8 million from USD 11.9 million, with EBITDA margins climbing to 10.7% from 7.9%.

"We delivered margin expansion due to improved efficiency and plant utilization with 27 manufacturing lines operating at near 100% capacity, and three manufacturing lines in transition during the quarter," said president and chief executive Steven Lockard. The company plans to start up a number of new lines in Mexico and Turkey in the second half of 2016. This will drive future growth, but will add to margin pressure in the near term, Lockard said.

Net sales grew 29.7% to USD 194.3 million on the back of a 49.6% increase in the number of wind blades delivered. Total billings, meanwhile, increased 40.5% to USD 196.1 million. The company expects total billings of between USD 380 million and USD 390 million for the second half of the year, or USD 750 million-760 million for the full year.

For the first six months of 2016, TPI recorded a net profit of USD 13.3 million, against a loss of USD 1.6 million a year ago. Net sales were up to USD 370.4 million from USD 245.3 million.

(USD 1.0 = EUR 0.909)

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