Denmark

Denmark

Trade wars hit Vestas' profit margin in 'busy 2019'

Vestas CEO Henrik Andersen warned trade wars and tariffs continue to hinder the wind power industry, as the manufacturer revealed its profit margin shrank despite a record-high order intake and increases in revenue and operating profit in 2019.

Vestas CEO Henrik Andersen described 2019 as an “extraordinarily busy year”
Vestas CEO Henrik Andersen described 2019 as an “extraordinarily busy year”

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The manufacturer’s Ebit margin before special items was 8.3% for 2019, down 1.2 percentage points from the previous year, with the company blaming a lower gross profit margin and higher capacity costs.

This came despite Vestas logging 17,877MW of onshore turbine orders — a 25% increase year on year and its highest ever intake — and boosting its revenue to €12.1 billion and operating profit to €1 billion.

Revenue from its onshore service business also grew 12% to €1.87 billion in 2019, “positively impacted by an increasing fleet of installed wind turbines”, the manufacturer stated.

Andersen described 2019 as an “extraordinarily busy year” and explained that trade wars and tariffs had caused execution costs to increase, a trend he expects to continue into 2020.

Offshore

MHI Vestas only received 48MW of firm and unconditional orders in 2019, but still made a €6 million profit for the year, down from a €26 million profit in 2018.

Its revenue rose 29% to €1.43 billion, driven by deliveries to projects in Danish, Belgian and German waters.

The offshore turbine manufacturer has 2,870MW in firm and unconditional agreements plus 3,780MW in conditional orders and preferred supplier agreements, which it stated gives it “a good foundation for the future”.

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