Wind turbine maker Vestas says price power improving, shares jump

The rotor blade of a wind turbine is displayed on the “Hannover Messe” industrial commerce truthful in Hanover April 19, 2010. REUTERS/Christian Charisius/File Photograph

COPENHAGEN, Aug 10 (Reuters) – Wind turbine maker Vestas (VWS.CO) expects to ship extra constructive outcomes subsequent yr, its chief government stated on Wednesday, as excessive prices from uncooked supplies and transport, which hit second-quarter outcomes, are handed on to clients.

Shares in Vestas rose 4% after the agency stated it raised its costs within the second quarter by 22% in comparison with the identical interval final yr, an indication that the corporate’s hard-hit revenue margins may enhance.

Heightened competitors, provide disruptions as a result of COVID-19 pandemic and hovering metals costs exacerbated by the struggle in Ukraine have made it tough for wind turbine makers to generate constructive margins, regardless of stable demand.

The Danish agency reported a quarterly lack of 182 million euros ($185.73 million) earlier than curiosity and tax (EBIT) earlier than particular gadgets, wider than the lack of 143 million forecast by analysts in a Refinitiv ballot.

That resulted in an EBIT margin of minus 5.5%.

However the common price of onshore merchandise within the second quarter, generally known as the common promoting worth, had elevated to 960,000 euros per megawatt, Vestas stated.

“The value on the orders they get is solely considerably increased than what we anticipated, and that makes it much less dangerous that the whole order consumption is decrease than anticipated,” Sydbank analyst Jacob Pedersen instructed Reuters.

“Now we have taken in orders on the highest worth stage in ten years,” Chief Govt Henrik Andersen instructed Reuters. “Our worth growth will result in a extra constructive 2023,” he added.

Andersen additionally stated a brand new power invoice handed within the U.S. Senate on Monday was “very supportive of renewable power in america over the subsequent ten years.” If handed within the Home of Representatives, it might strengthen Vestas’ order consumption subsequent yr and in 2024, he added. learn extra

In Might, Vestas slashed its 2022 margin forecast as a result of struggle in Ukraine and writedowns in its offshore enterprise. Rival Siemens Gamesa (SGREN.MC) final week lowered its 2022 outlook and stated earnings would stay adverse by way of 2023. learn extra

“With steerage retained and onshore pricing on new onshore orders higher than anticipated, we see two key positives to point enhancing momentum on profitability into H2 and 2023,” Citi analysts stated in a word.

($1 = 0.9799 euros)

Reporting by Nikolaj Skydsgaard; modifying by Terje Solsvik, Jason Neely and Kim Coghill

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