Vestas CEO warns of threat to profit from tariffs

"Unprecedented high activity levels" across all regions boosted Vestas' Q3 revenue by 30% over the same period last year, but CEO Henrik Andersen warned that tariffs and increased execution costs were threatening the company's profitability.

Vestas recorded 4,738MW of firm and unconditional orders in Q3, up 45% from one year earlier

Vestas’ revenue of €3.64 billion marked a 30% year-on-year increase in Q3 2019, pushing its Ebit before special items up 55% to €429 million.

The manufacturer’s 4,738MW of firm and unconditional orders in Q3 was up 45% year-on-year, and drove the value of its turbine order backlog up 57% to €16.5 billion by the end of the quarter.

Vestas’ service revenue in the quarter was up 8% to €442 million, and by the end of September, its expected future revenue from service agreements amounted to €16.3 billion, up 23%.

It claimed its increase in revenue over the quarter was driven by all regions, with Andersen citing "unprecedented high activity levels" in the wind power sector.

The manufacturer also said "continued strong global demand" pushed up its service revenue.

But Andersen warned: "Although our service business continued to grow with high margins and the average selling price was stable in the quarter, our profitability remains impacted by tariffs and increased execution costs."

Nevertheless, Vestas maintained its full-year revenue guidance of €11-12.25 billion, Ebit margin before special items of 8-9% and total investments of approximately €800 million.


MHI Vestas, the Danish manufacturer’s 50:50 offshore joint venture with Mitsubishi Heavy Industries, announced no firm turbine orders in Q3.

However, deliveries to one offshore project — the 269MW Deutsche Bucht wind farm — meant the manufacturer recorded revenue of €399 million for the quarter, down 37% on one year ago.

Net profit in the joint venture was €4 million in the third quarter, compared to €42 million in the same period last year.

The manufacturer claimed "additional costs" in relation to an unspecified "delayed project" were behind this reduction in net profit.