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Germany

Germany

Recovering at different speeds

German wind turbine manufacturers Nordex and Repower Systems, both of which spent the last year restructuring, are running neck-and-neck in their internal competition to be the biggest and best. Repower was marginally ahead on total sales in 2005, but Nordex is the first of the two to claim a profit, according to its preliminary results for the year.

Nordex sales were up 44% to EUR 309 million in 2005, from EUR 214 million in 2004. Earnings before interest and tax (EBIT) -- and before extraordinary items of EUR 5.4 million -- were EUR 0.3 million, compared with a EUR 21.7 million deficit in 2004. The extraordinary costs relate to the company's recapitalisation, "impairment charges on receivables and warranty expenditure on older projects." Nordex expects sales of EUR 400 million this year and is projecting an EBIT margin of around 2.5%.

Repower achieved a slightly higher turnover of EUR 328.1 million, but sales were up by less than 3% on 2004's EUR 320.7 million. Company losses for the year increased to EUR 4.3 million from EUR 3.6 million in 2004. This year the company is hoping for better things. Repower points out that international sales in 2005 made up the bulk of its business for the first time, with 73.1% of its production leaving Germany compared with 32.7% in 2004. With turbine prices rising from an average EUR 730,175/MW in past years to EUR 853,726/MW in 2005, Repower is confident it will achieve "considerable sales growth and a positive operating result for 2006."

Last month Repower announced a EUR 2.16 million capital increase (to EUR 8,101,797), which its two largest stakeholders, Portuguese construction group Martifer and French nuclear company Areva, have both committed to. Dresdner Bank will subscribe for the 2,160,599 new shares and offer all but 180,200 to existing shareholders in a ratio of three to one at a purchase price of EUR 37.00 per share.

Repower reserves the right to choose the purchaser, which is most likely to be Areva. Areva may also buy any shares not taken up, but is unlikely to raise its ownership beyond 29.99%, says Repower's Thomas Schnorrenberg. Under German law, a 30% stake is considered a controlling interest, requiring Areva to make a fair offer for all the outstanding shares at a minimally acceptable price. Areva currently owns 20.9% and Martifer 29.7% while 49.4% of shares are in free float.

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