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TPI Composites swings to Q2 profit

Image source: Wood Group

August 8 (Renewables Now) - After booking a loss in the first quarter of 2019, US-based composite wind blades maker TPI Composites Inc (NASDAQ:TPIC) reported a second-quarter net profit and made some adjustments to its outlook for 2019 and 2020.

In the second quarter, TPI booked a net profit of USD 1.8 million (EUR 1.6m) against a loss of USD 4.1 million a year before, translating into earnings per diluted share of USD 0.05, as compared to a loss of USD 0.12 for the year-ago period.

CEO Steve Lockard explained that the positive result was recorded after the company managed to stabilise its production following a labour strike in Matamoros, Mexico, which it previously said will affect volumes through the rest of 2019. Meanwhile, it completed talks to sell the remaining turbine blades produced for insolvent German wind turbine maker Senvion SA (ETR:SEN) directly to its customer and reached a mutual agreement with the embattled company to terminate their two-line supply agreement. “Significant progress” was also made in relation to the consolidation and restructuring of TPI, the CEO said on Wednesday, adding that the company remains “confident and committed” to its overall business model and strategy.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose to USD 19.5 million from USD 13.5 million, with the respective margin climbing to 5.9% from 5.8%. Revenues improved by 43.4% year-on-year to USD 330.8 million, of which USD 301.8 million were from sales of wind blades.

Capital expenditures decreased to USD 19 million from USD 30.6 million a year back. They came mainly from machinery and equipment for new facilities and expansion or improvements at existing sites.

More details on TPI’s financial performance are available in the following table.

Figures in USD (except percentages) Q2 2019 Q2 2018 H1 2019 H1 2018
Net sales 330.8m 230.6m 630.6m 484.6m
EBITDA 11.7m 10.1m 7.6m 31.1m
Adjusted EBITDA 19.5m 13.5m 22.5m 40.9m
Adjusted EBITDA margin (%) 5.9% 5.8% N/A N/A
Net profit (loss) 1.8m (4.1m) (10.3m) 4.6m
Earnings per diluted share 0.05 (0.12) (0.29) 0.13

TPI made changes to its guidance for 2019, which are presented in the table below.

Figures in USD (except percentages) Old 2019 New 2019
Net sales and total billings 1.45bn - 1.5bn Unchanged
Adjusted EBITDA 80m - 85m Unchanged
Earnings (loss) per share (0.03 - 0.09) (0.18-0.23)
Dedicated manufacturing lines at year-end (number) N/A 52 - 55
Capital expenditures N/A 95m - 100m
Average sales price per blade N/A 135,000 - 140,000

For next year, in particular, it lowered its net sales and total billing forecast to USD 1.6 billion-1.8 billion from USD 1.7 billion-1.9 billion, while adjusted EBITDA is now seen at between USD 140 million and USD 160 million, instead of USD 170 million and USD 190 million. CEO Lockard blamed the reduction of projections to the faster-than-expected pace of transitions and the resulting impact on contribution margin and transition costs.

“As LCOE (levelised cost of energy) continues to trend down, the strong global wind market and growing demand for decarbonization give us confidence in the underlying long-term economics of our business and the wind industry, despite the near-term volatility increased transitions may create in our quarterly and annual results,” the CEO said.

(USD 1.0 = EUR 0.892)

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Veselina Petrova is one of Renewables Now's most experienced green energy writers. For several years she has been keeping track of game-changing events both large and small projects and across the globe.

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