Market conditions hit Nordex results

GERMANY: German turbine builder Nordex has suffered a drop in revenue and pre-tax earnings (Ebit) for the first nine months of the year.

Nordex clocked up sales of €614.2 million for the period, nearly 25% below the previous year’s equivalent figure of €814 million. The company said this was "chiefly due to weak market conditions".

Ebit also fell 21%, to €17.3 million compared with €21.9 million in the same period of 2009.  

It was unable to mirror rival German turbine builder Repower Systems, which posted lower sales but higher Ebit in its provisional half-year results on October 25.

Reporting on the first six months preceding September 30, Repower Systems saw revenue fall 18% to €499 million compared with €609.7 million in the comparable period of the previous business year.

However, Repower's Ebit was up by 9.6% to €34 .3million on the €31.3 million clocked up in the same six-month period of the previous year. 

Nordex points to the considerable surplus production capacity in the turbine market in the wake of the economic crisis.

CEO Thomas Richterich said competitive intensity has increased over the course of 2010, but Nordex has reacted by submitting flexible bids and obtained contracts for major projects on a profitable basis. 

Conversely, the company has also withdrawn from bidding in particularly contested projects and as a result, order intake will fall short of original targets.

As a result, Nordex has therefore reduced its previous full-year forecast for a small increase in sales for 2010, compared with last year’s €1.2 billion, and now expects around €1 billion. Order intake at the end of September 2010 stood at €530 million, compared with €638 million at the end of September 2009.

Only slight revenue growth is expected in 2011. The company anticipates "sustained pressure" on prices in the wind industry and is therefore initiating a multi-year cost cutting programme "including product construction innovations."