Vestas back to Q3 profit, lifts 2014 sales outlook

Nov 10, 2014 - Danish wind turbine maker Vestas Wind Systems A/S (CPH:VWS) returned to a third-quarter net profit of EUR 102 million (USD 127m) and upgraded its sales and earnings before interest and tax (EBIT) margin forecast for 2014.

The Danish firm booked a net loss of EUR 87 million in the third quarter of 2013. In a statement on Friday, it explained that the July-September quarter was “characterised by strong operational performance and high activity levels.” Vestas now expects full-year EBIT margin before special items of at least 7%-8%, as compared to 6% previously, and revenues of EUR 6.4 billion-7 billion, up from EUR 6 billion. The wind turbine maker also revised upwards its free cash flow guidance for 2014 to EUR 400 million-700 million from EUR 300 million due to its expected delivery plan for the rest of the year and an enhanced cost base.

Vestas’ EBIT before special items in the third quarter of 2014 rose to EUR 163 million from EUR 67 million a year earlier, mainly helped by higher project volume and improved average margins. The corresponding margin was 9%.

Free cash flow in the period under review went up by EUR 49 million to EUR 105 million.

Vestas generated a revenue of EUR 1.81 billion, 26% higher than in the year-ago period, with 61% of the total coming from Europe and Africa. The Americas and the Asia Pacific accounted for 30% and 9%, respectively, of the wind turbine manufacturer’s sales. The Danish firm produced and shipped 1,682 MW of turbines, 43% more than a year back.

Nevertheless, the intake of firm and unconditional wind turbine orders declined by 24% to 1,170 MW. As of end-September, Vestas’ order backlog stood at EUR 6.7 billion, down 9% in annual terms, and agreements with contractual future revenue reached the same amount.

(EUR 1.0 = USD 1.244)

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