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Spain

Spain

Gamesa back in the black

SPAIN: Gamesa swung into profit in 2013 despite a fall in revenue, as its cost-cutting programme takes effect.

Installations were down but Gamesa still posted a profit
Installations were down but Gamesa still posted a profit

The Spanish manufacturer posted a net profit of EUR 49 million, compared with a loss of EUR 501 million the year before.

This was achieved despite a 12% fall in revenue to EUR 2.3 million.

2013 was marked by cost-cutting measures that included redundancies and facility closures as the company sought to deal with the restricted wind market.

As such, Gamesa reduced its structural costs by EUR 119 million, 19% more than set out in its restructuring plan. Working capital was reduced by EUR 243 million.

Impressively, this allowed the company to push its Ebit margin up from 1.7% to 5.5%, with a target of 7% set for this year.

Over the year, turbine sales amounted to 1,953 MW, 8% less than in 2012. The company said that this was largely due the "slump in the US and Chinese markets", but that this was partly offset by rising revenue from emerging markets in Latin America, Asia and Africa.

And Gamesa also said that its turbine sales improved progressively throughout the year, with fourth quarter sales up 22% on the year before. This trend is expected to continue in 2014, the company said.

In contrast with the year's decline in installations, operations and maintenance revenues expanded by 6%, but were impacted by a decline in the sale of spare parts during the fourth quarter

The company also managed to reduce its debt by EUR 275 million through generating a healthier free cash flow.

With the wind market expected to grow this year, Gamesa said that it believe it will reach a volume between 2.2GW and 2.4GW in 2014.

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