Senvion banks on busy second half

GERMANY: Turbine manufacturer Senvion is relying on a busy second half of the year for installations after revenues for the first six months dipped 43.9% year on year.

Installation levels fell in the first half of 2018, resulting in a fall in income
Installation levels fell in the first half of 2018, resulting in a fall in income

The German firm saw revenue total €466 million for the first half of 2018, down from €830 million in the same period of 2017.

Adjusted Ebitda also fell 79% from €62 million to €13 million, while gross profit dropped from €261 million to €210 million.

Gross profit margin, however, increased from 31.5% to 45.1%, thanks to higher revenues from Senvion’s servicing department, the manufacturer said.

Senvion said its income fell as a result of lower installation activity in the first half of the year. Installations fell by 54% year on year to 288MW.

The manufacturer highlighted "unusual events" that contributed to some project delays, impacting installation levels.

These included the discovery of unexploded ordnance at a site in Australia, plus heavy rains and delays in grid connection in Chile.

Senvion expects higher activity levels in the second half of 2018 to meet guidance for the year of €1.8-1.9 billion in revenue.

The firm said potentially 1.2GW (80%) could be installed in the second half of 2018, up from the 300MW in the first six months of the year. Historically, most of the firm’s installation takes place in the H2.

Order intake

Onshore order intake grew 26% year on year to €797 million, equating to roughly 1,063MW.

However, Senvion did not book any offshore orders so far in 2018, meaning total turbine order intake fell 15% from €939 million in H1 2017.

Much of the intake was seen in new markets, the company added, notably Australia and India, where Senvion booked 226MW and 432MW respectively.

The firm has also won roughly 800MW of orders in Australia, Chile, Spain and India so far in Q3.

Manav Sharma, acting CEO and CFO of Senvion, said: "Annual demand for wind turbines could double within a decade. However, in the short-term, the industry needs to adapt to the new pricing levels.

"We have been highly successful in new markets, helping us build visibility of 20-40% growth in revenues by 2019.

"We see the significant increase of orders in markets that we defined last year to be Senvion's key regions as further confirmation of our general transformation strategy."

Sharma is filling in for former CEO Juergen Geissinger, who left the company in May.

The company said the search for a new chief executive was "well underway", but could not put a timeline on the appointment.

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