New tender systems in India and Germany hit OEM profits

WORLDWIDE: 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.

Location, location, location… Widespread global presence has helped Vestas in tough year for many (pic: Andreas Birresborn)
Location, location, location… Widespread global presence has helped Vestas in tough year for many (pic: Andreas Birresborn)

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.

The fall is attributed to a 14% drop in Q3 deliveries. As a result, the leading turbine manufacturer's revenues for the first nine months of 2017 totalled €6.83 billion, down 1.3% from the same period of 2016.

However, order intake in the third quarter increased 30% from €1.6 billion to EUR2.1 billion — equating to 2.6GW in orders. Over the first nine months of 2017, Vestas said order intake was 23% higher year on year, led by the Americas and Asia Pacific. Vestas' combined turbine and service order backlog remains at more than €20 billion.

Siemens Gamesa Renewable Energy's revenues fell 12% year-on-year to €5 billion during the first six months since the two manufacturers merged, the company said.

The firm attributed this to a temporary upheaval of the Indian market while the country transitions to an auction system.

SGRE's underlying earnings before interest and tax (Ebit) fell 18% to €774 million for the full fiscal year ending on 30 September. But in the half-year since the companies merged in April, underlying Ebit came to €192 million, a drop of 63.4% year on year.

The company's order intake grew 40% to 3GW in the three months to 30 September, with 2.2GW of onshore orders, it said. SGRE's current order backlog is worth €27 billion.

The firm announced it would axe 6,000 jobs across 24 countries and streamline its product portfolio, reducing the range of onshore products by around 65% and implementing a single-platform strategy in the offshore sector.

Nordex has reported a 10.8% fall in Ebitda over the first nine months of 2017, while sales were down from €2.34 billion to €2.32 billion.

Order intake was below expectations for the period at €1.11 billion — just over half the €2.17 billion in the same period last year.

Despite new Nordex CEO Jose Luis Blanco's prediction of a "robust" fourth quarter, he warned of more of the same in 2018 and 2019 as the company starts cutting costs, particularly in Europe. "For Europe, and especially Germany, there will be a substantial drop in business in 2018, with no significant change in 2019, but recovery will come in 2020 and 2021," he said.

The German firm is looking to reduce structural costs in its European division by €45 million in 2018.

Senvion's revenue dropped 17% year on year to EUR480 million in Q3, due to lower earnings in the global offshore and Canadian onshore markets. The firm also reported a 10% fall in revenue to €1.31 billion for the first nine months of 2017 compared with the previous year.

Senvion's order book fell by 5.7% to €1.47 billion in Q3, but its nine-month intake was still up 51% year on year. Senvion's services business saw its backlog inching up 1.1% in the quarter to €2.49 billion

In its nine-month financial results, Leading Chinese OEM Goldwind saw revenues total CNY 17 billion ($2.56 billion), an increase of 0.2% year on year. The increase was helped by improved power generation, the company said.

However, gross profit for the period fell 1% from CNY 5.19 billion to CNY 5.13 billion as a result of lower gross margins in turbine manufacturing and its engineering, procurement and construction business.

Goldwind's Q3 figures show the company is bouncing back after a tricky first half of the year. Revenue jumped 18.6% to CNY 7.17 billion during the quarter, while gross profit also grew by 9.2% to CNY 1.96 billion from CNY 1.8 billion a year ago.

Goldwind's current order backlog totals 15.4GW, with 61% of that for its 2.X platform.

Suzlon recorded third-quarter losses in revenue against a backdrop of uncertainty in its domestic market.

The Indian firm's INR 12.148 billion ($185.7 million) Q3 income from operations marked a fall of 55% on the previous quarter and a 56% drop year on year.

Suzlon reported a profit of INR 681 million for the third quarter — a 72% fall year on year after filing for voluntary liquidation of its Brazilian operations in July.

Compatriot Inox Wind has recorded a INR 340 million ($5.25 million) loss in the first half of its 2018 financial year on the back of a downturn in the Indian market due to the shift in tender regimes.

Revenues in the six months to the end of September also dipped 85%, from INR 12.45 billion last year to INR 1.86 billion this year.

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