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Vestas' Q1 profit falls by 75.5%, backlog at record EUR 28.3bn

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

May 8 (Renewables Now) - Danish wind turbine maker Vestas Wind Systems A/S (CPH:VWS) today reported a net profit of EUR 25 million (USD 28m) for the first quarter of 2019, a year-on-year drop of 75.5%.

The company’s margins were hit by orders received during the price decline in 2017 and higher costs related to tariffs and higher raw material prices. The earnings before interest and tax (EBIT) margin fell to 2.5% from 7.4% a year ago, while Vestas confirmed its guidance for an EBIT margin before special items of 8% to 10% for the full 2019.

Results in EUR million Q1 2019 Q1 2018
Revenue 1,730 1,694
Production costs (1,495) (1,413)
Gross profit 235 281
SG&A costs (192) (155)
EBITDA 169 225
EBIT 43 126
Net profit 25 102
Free cash flow* before acquisitions and financial investments (876) (587)

Vestas’ combined order backlog has now reached an all-time high level of EUR 28.3 billion. This includes a wind turbine order backlog of EUR 13.3 billion as at the end of March and service agreements with expected contractual future revenue of EUR 15 billion.

The intake of firm and unconditional turbine orders in the first quarter jumped by 84% on the year to 3,004 MW. CEO Anders Runevad said Vestas is prepared for “an extraordinarily busy 2019”.

MARKETS

Deliveries in the quarter amounted to 1,601 MW, up from 1,192 MW a year before. The Americas accounted for more than half with 991 MW received, up 262% year-on-year. Deliveries to the US reached 704 MW, as compared to 261 MW a year ago. Vestas said demand in the US and Latin America remains on the rise. Orders doubled to 1,663 MW in the first quarter of 2019 from 813 MW in 2018, mainly thanks to strong order intake in Brazil and further growth in the US.

First-quarter deliveries to Europe, the Middle East and Africa (EMEA) more than halved to 309 MW. Order intake inched up 10% to 720 MW as contracts in France more than offset a decrease in Sweden and Italy. Vestas also secured its first merchant wind projects in the UK and Denmark.

In Asia Pacific, turbine deliveries grew to 301 MW from 244 MW in the first quarter of 2018. The main markets were India and Australia. Orders secured in the period jumped to 621 MW from 161 MW as a result of continued strong order intake in Australia and demand from New Zealand, China, Taiwan and Vietnam.

Vestas continues to expect 2019 revenue of EUR 10.75 billion-12.25 billion.

(EUR 1 = USD 1.12)

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Browse all articles from Tsvetomira Tsanova

Tsvet has been following the development of the global renewable energy industry for almost nine years. She's got a soft spot for emerging markets.

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