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Germany

Germany

Nordex earnings grow ahead of quieter 2017

GERMANY: The Nordex Group has reported earnings of €285.5m in 2016, a 56.6% increase year-on-year, but warns of a dip in 2017 activity.

In Germany, Nordex increased its market share to 14.9% from 11.7% in 2015
In Germany, Nordex increased its market share to 14.9% from 11.7% in 2015

The group's €3.4 billion revenues met expectations for the year, reflecting the increase in Latin America sales following the acquisition of manufacturer Acciona Wind Power in April 2016.

Europe contributed €2.3 billion in sales, 69% of the total, while the Americas increased its share from 11.7% to 22%, the German manufacturer said.

Revenue from the group's service business also grew 28% to €271.6 million in 2016, Nordex added. Consolidated net profits grew 82.4% to €95.4m.

According to the group's financial results, installations increased by 55% to 2.6GW globally, up 55% compared to 2015 and pre-Acciona.

It was enough to re-enter the top ten OEMs rankings by analyst firms FTI Consulting and Bloomberg New Energy Finance.

In Latin America, new installations grew 802%, the company said, with an increased market share of over 17%, compared to just 1.2% in 2015.

There was also a strong increase of 119% in its "rest of the world" which includes the Middle East, Africa and Asia.

Nordex said 38% of orders (in terms of Euros) was for its Acciona Wind Power platforms.

In its competitive domestic market of Germany, Nordex increased its market share to 14.9% from 11.7% in 2015.

Outlook

On Friday (24 February), Nordex warned revenues in 2017 and 2018 are set miss previous expectations.

In today's results presentation, Nordex said over the next two years, there would be an increased pressure on volumes and prices.

Particularly, it expects a shrinking European market, on which it heavily relies, as the industry moves to an auction-based system.

The company said its programme to reduce cost of energy should counteract pricing pressure in 2017, meaning its Ebitda margin this year should remain stable, despite expectations of lower revenues. In 2016, Nordex's Ebitda margin was 8.4%.

However, further pressure in to 2018 is expected to increase beyond the cost programme, the manufacturer said.

Revenues in 2017 are also expected to suffer as a result of a delay in entering the Indian market, according to the firm.

Acciona Wind Power was in the process of building a manufacturing facility in India when it was acquired by Nordex in 2016.

The Nordex board expects revenues in 2017 to reach between €3.1-3.3bn and €3.4-3.6bn in 2018, down from over €4.2bn.

Nordex's share price has recovered to €14.73 per share on Wednesday after dramatically falling 35% to €12.54 following Friday's revenue warning.

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