Slower Q3 drags Vestas results down for the year

DENMARK: A 5% fall in third quarter revenues has seen Vestas' results for the first nine months of the year stagnate at the same level as 2016.

Vestas' orders from Asia-Pacific have trebled in 2017 compared with last year
Vestas' orders from Asia-Pacific have trebled in 2017 compared with last year

Revenue in the three months to the end of September totalled €2.74 billion, down from €2.9 billion in Q3 last year. Gross profit was €526 million – down from €591 million – while earnings before interest, taxes, depreciation and amortisation (Ebitda) fell from €527 million to €453 million this year.

The fall is attributed to a 14% drop in Q3 deliveries, blamed mostly on the US, Vestas said.

As a result, the leading turbine manufacturer's results for the first nine months of 2017 are on a level with the same period of 2016.

Revenue in the period totalled €6.83 billion, down 1.3% from a year earlier.

It is set to be just a minor setback in the year, according to Vestas, as order intake in the third quarter increased 30% from €1.6 billion to €2.1 billion — equating to 2.6GW in orders.

Over the first nine months of 2017, Vestas said order intake was 23% higher year on year.

Orders are 48% higher in the Americas, and increased from 340MW to 1.1GW in Asia-Pacific. European orders, however, fell 15% to 2.8GW.

Vestas said average the selling price in the quarter was €0.8 million/MW, which was "negatively impacted by highly competitive markets leading to price pressure".

The company's combined turbine and service order backlog remains at over €20 billion.

Despite the slow third quarter, Vestas has upgraded its revenue forecast for the year slightly from €9.25-10.25 billion to €9.5-10.25 billion, the manufacturer added.

"In the third quarter, Vestas delivered increased order intake and healthy earnings in a market that is seeing accelerated competition and decreasing profitability.

"Our order backlog and service revenue both increased 18% year on year, while nine-month revenue is on par with 2016.

"As the market continues to evolve at a fast pace, we remain focused on continuing our leadership position by executing our strategy and increasing efficiency," CEO Anders Runevad said.

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