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Vestas halves Q2 profit, achieves record-high order intake

Vesas wind turbines. Image by: Vestas (www.vestas.com).

August 15 (Renewables Now) - Danish wind turbine maker Vestas Wind Systems A/S (CPH:VWS) today released its financial report for the second quarter of 2019, showing that its profit for the period had halved while revenue declined by 6% on the year.

Vestas’ second-quarter profit dropped to EUR 90 million (USD 100.3m) from EUR 184 million in April-June 2018, with earnings before interest and tax (EBIT) before special items and adjusted for tax falling to EUR 96 million from EUR 194 million. EBIT margin went down to 6% from 11.5%.

“Prices remained stable in the quarter, but further increases in tariffs, raw material prices and transport costs, continue to increase execution costs, causing our gross margin to decline compared to the same period last year,” explained group president and CEO Henrik Andersen.

The following table gives more details about the company’s second-quarter and first-half performance.

Figures in EUR million, except percentages Q2 2019 Q2 2018 H1 2019 H1 2018
Revenue 2,121 2,260 3,851 3,954
Gross margin (%) 14.2 18.4 13.9 17.6
EBITDA 255 369 424 594
EBIT 128 259 171 385
EBIT before special items adjusted for tax 96 194 128 289
Profit for the period 90 184 115 286

During the April-June quarter, Vestas reached a record-high order intake of 5,696 MW compared to 3,807 MW a year earlier and its value rose to EUR 4.3 billion from EUR 2.7 billion. The wind turbine order backlog reached 20,753 MW and EUR 15.9 billion in value, compared to 13,521 MW and EUR 10.2 billion.

The company delivered 2,069 MW in the three-month period, up from 1,971 MW. This reflects a large share of deliveries in France, Italy and Spain.

Vestas narrowed its full-year revenue forecast to a range of EUR 11 billion-12.25 billion compared to the previously estimated EUR 10.75 billion-12.25 billion, the reason being an improved visibility for the remainder of the year. The guidance for EBIT margin before special items was narrowed as well, to 8%-9% from 8%-10%.

The company now expects total 2019 investments of about EUR 800 million rather than EUR 700 million.

(EUR 1.0 = USD 1.115)

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