Bumper Q3 masks difficult 2019 for manufacturers

The wind-power industry's major western OEMs recorded strong revenue growth during the July to September reporting period, with most also registering a positive pre-tax profit (Ebit).

Nordex… German firm raised capital from main shareholder Acciona to ramp up production
Nordex… German firm raised capital from main shareholder Acciona to ramp up production

Google Translate

But this covers-up their continuing difficulties, with Vestas, Nordex and GE Renewable Energy operating at lower levels across the whole of 2019 so far compared to the previous year. Ongoing pricing pressures, trade and tariff disputes, and the lacklustre German market remain millstones weighing down the industry.

Vestas sounds warning

Vestas’ revenue of €3.65 billion marked a 29.7% year-on-year increase in Q3 2019.

The Danish manufacturer’s 4,738MW of firm and unconditional orders in Q3 was up 45.3% year on year, and drove the value of its turbine-order backlog up 57% to €16.5 billion by the end of the quarter.

The firm claimed all regions contributed to the increase in revenue over the quarter, with chief executive Henrik Andersen citing "unprecedented high activity levels" in the wind-power sector.

"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," Andersen warned, however.

Record orders fail to stop job cuts

Reporting results for its full financial year, which runs from October to September, Siemens Gamesa Renewable Energy (SGRE) recorded revenues of €10.23 billion, meeting its target for the year.

But a new round of job cuts is on the way as the company tries to optimise its activities in an ultra-competitive environment.

The firm’s fourth-quarter revenue grew 12.4% to nearly €3 billion, with Ebit also up 16.2% to €250 million. Onshore wind turbine order intake amounted to 3,147MW.

The value of its July-September orders was worth a record €2.24 billion.

However, SGRE said it plans to reduce its global workforce by around 600 in a series of "structural changes" it order to maintain its competitiveness.

The next round of job cuts, which could affect workers across the worldwide business, is in addition to the 600 jobs lost in Denmark that the company announced in late September.

SGRE chief executive Markus Tacke said the Danish job losses were the result of an adjustment in demand, affecting a number of blade-manufacturing roles.

The latest round of redundancies will be to adjust structural costs, Tacke said, affecting roles in the "corporate" side of the business in order to "streamline" its set up.

Losses continue at GE

GE Renewable Energy continues to operate at a loss, posting its third straight quarterly negative result despite growth in revenue and orders.

The US-based manufacturer saw its revenues in Q3 grow 13% year on year to $4.43 billion, while order income totalled $5 billion — up 30% on the same quarter of 2018.

For onshore wind, GE received 3.41GW of new business, a 56% increase on the same period a year ago.

The company explained the loss in Q3 was "driven by higher losses on legacy contracts, pricing, tariffs and increased research and development investment".

Nordex upbeat though still in the red

Finally, Nordex remained in the red, with a net loss of €21 million in Q3. But the company was in buoyant mood as sales increased 16% "as expected", while Ebit crept back into the black, totalling €8 million. Third-quarter revenue was up 38% to €916 million.

The company had been planning for a busy second half of 2019, following losses in both Q1 and Q2, partly the result of a ramp-up in production in anticipation of increased activity in the latter quarters of the year.

Across the first nine months of the year, Nordex increased production output by 78%, from 1,736MW in 2018 to nearly 3.1GW so far in 2019.

Nordex won orders for 1.7GW in the quarter, taking its total for the year to 4.74GW of new business.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in