Vestas revenue up by a third

DENMARK: Vestas' revenues for the first half of 2011 were 31% higher than those for the same period last year and profits for the second quarter of 2011 were better than expected.

In H1 2011 Vestas' turnover was €2,461 million with a pre-tax profit of €8 million, up from €1,881 million in revenues in H1 2010 with a pre-tax loss of €219 million. Pre-tax profit for the second quarter was €77 million, better than the €62 million predicted by analysts.

With the firm restating its annual targets of €7 billion turnover and a 7% profit margin and 98% of this turnover already accounted for by new orders, analysts were advising investors to buy shares in the firm.

The restating confounded market predictions of a downward revision of targets, which had encouraged some traders to gamble on short-selling as much as 15% of Vestas shares in the hope that their price would fall.

However, the opposite has happened and following today's results announcement, Vestas' shares rose by 23.8% to DKK 110.20 (€14.80) by mid-morning.

Bryan Garnier & Co analyst Julien Desmaretz said in his advisory note that Vestas' closing share price of DKK 89 yesterday undervalued the firm by as much as 35% relative to Gamesa.

Vestas also announced today it would maintain its FY2011 guidance of 7-8 GW of new orders. However, to date, Vestas has secured just 3.5 GW of new orders and Matrix Group analyst Michael McNamara said in his advisory note that the firm would need to accelerate its new order announcements to hit the 7-8 GW target.

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