TPI Composites net income halved

UNITED STATES: Blade manufacturer TPI Composites returned to profit in the third quarter as it reduced capital expenditure and increased its earnings and net sales.

TPI reached deal with GE in August to maintain the supply agreement from its plant in Iowa (above) until its expiration in December 2020

Net income of $9.5 million was down 56.1% on last year, but up from a $4.1 million loss in the previous quarter.

The company’s number of 'blade sets' sold and total billings were down 20.2% and 10.5% respectively year-on-year, but level with the second quarter of 2018.

However, while TPI’s adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) of $17.6 million were down 36.9% year-on-year, they were up 30% on the second quarter.

Similarly, the manufacturer’s net sales of $255 million were flat year-on-year, but increased 10.5% from the previous quarter.

Further, its capital expenditure of $8.3 million was down 72% from the second quarter, when it had spent heavily on new facilities, expansion or improvements at existing facilities, and enhancing its information technology systems.

TPI added the decline of its adjusted Ebitda was "driven primarily by the increase in start-up and transition activity and the resultant lost contribution margin from blade volume lost during the transitions".

TPI concluded a deal with GE to extend its supply agreement at one of its plants in Mexico by two years to 2022 and increase the number of manufacturing lines there from three to five.

GE also agreed to transition to a larger blade model at TPI’s plant in Iowa, US, in early 2019 and to maintain the supply agreement there until its expiration in December 2020.