Manufacturers' profits rise as consolidation continues

WORLDWIDE: Major OEMs have reported a series of positive financial results with most seeing increased profits and upgraded forecasts.

Acquisition… Senvion has bought blade company Euros, with production facilities in Germany and Poland (pic: Senvion)
Acquisition… Senvion has bought blade company Euros, with production facilities in Germany and Poland (pic: Senvion)

Gamesa recorded a 63% increase in net profits across the first nine months of 2016, compared with the same period a year earlier. Net profit totalled EUR206 million due to a 42% increase in completed turbine sales.

The firm's strongest market, India, contributed 34% of the sales total, up from 28% in 2015.

Gamesa's shareholders also approved the merger with German manufacturer Siemens at the end of October, with the two firms set to create a €10 billion company.

Siemens, which reported its Q4 and full-year financial results in November, also had a strong performance ahead of the merger set to be completed in mid-2017.

Siemens' wind and renewables division recorded a profit of €132 million in the fourth quarter of its financial year, which ended on 30 September.

The 83% increase in profits was a result of a higher contribution from its servicing business, improved productivity and a 6% increase in revenues, Siemens said. Orders, however, fell 56% to €1.2 billion following an inflated Q4 in 2015, the company said.

Siemens' compatriots also fared well. Nordex felt the full benefit of its acquisition of Acciona Wind Power as the new addition contributed 25% to the order total.

Order intake in the nine-month period amounted to EUR2.19 billion, up 10% on a year earlier. Nordex's pre-tax earnings for the nine months to the end of September totalled EUR203 million, up 47% compared to the same period in 2015.

Also in Germany, Senvion said its pre-tax earnings increased 4.7% in the first nine months of 2016, compared with a year earlier. Gross profits also increased, despite a 5% fall in revenue across the nine months to €1.45 billion. The US-owned firm said it was still on course to meet its full-year guidance for revenues of €2.25-2.3 billion.

In mid-November, Senvion acquired blade development and manufacturing firm Euros Group in an all-cash transaction. Euros, based in Berlin and Poland, is involved in all stages of the blade manufacturing process, Senvion said, including master plug and mould design.

Elsewhere, Vestas said its of €2.9 billion revenues in Q3 represent an increase of 37% year-on-year. As a result, the Danish manufacturer has increased its revenue forecast for 2016 to €10-10.5 billion — up from €9 billion at the start of the year.

However, across the first nine months of 2016, Vestas' order intake was down. Over the first three quarters of 2015, Vestas received 6.28GW of orders, totalling €5.8 billion, compared with 5.96GW, worth €5.2 billion, in the same period of 2016.

Finally, GE Renewable Energy reported revenues over the nine months of $6.54 billion, up from $4.34 billion. The firm said it received $404 million in orders to repower and upgrade its US turbine fleet.

"We expect Q4 orders to be strong as the final fully qualified US production-tax-credit orders are placed. Repowering, upgrades and new units provide a strong outlook for Q4 and the future," said Jeff Bornstein, GE's chief financial officer.

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