Germany

Germany

Covid-19 costs mount as Nordex posts €71 million H1 loss

“Major production stops” and site interruptions pushed up costs and drove German turbine manufacturer Nordex to an operating loss in the first half of the year

Nordex made a €70.8 million operating loss in H1 2020 despite sales more than doubling to €2 billion
Nordex made a €70.8 million operating loss in H1 2020 despite sales more than doubling to €2 billion

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Nordex made an operating loss (Ebitda) of €70.8 million in the first half of the year despite its sales revenue doubling and a marked increase in installations.

Its net debt also tripled to €241.4 million between the end of December 2019 and the end of June 2020.

The German manufacturer explained that the impacts of the coronavirus pandemic had become “clearly noticeable” in the second quarter of the year, with “major production stops” and site interruptions causing heavy cost increases.

However, Nordex stated that it has a “strong financial structure for medium-term”, having secured a €350 million government loan, refinanced payments due in April 2021, extended a €1.2 billion guarantee credit facility for three years, and agreed to sell its European development pipeline to RWE.

CEO José Luis Blanco said: “While processes have normalised or been recalibrated, the pandemic remains a burden and provides an element of uncertainty. 

“The new credit line supported by the coronavirus guarantee programme is protecting us against the effects and remaining uncertainties caused by the Covid-19-pandemic. Hence we are confident that Nordex remains on its growth trajectory even under these circumstances.”

Nordex made a €70.8 million operating loss (Ebitda) in H1 2020 — down from an operating profit of €17.1 million one year earlier.

This came despite the company’s sales more than doubling to €2 billion in the first half of the year.

Its project segment sales more than doubled to €1.8 billion year on year — in line with installations nearly doubling to just under 2.3GW in 21 countries –  while its service segment sales – characterised by a steady stream of income – rose 15.4% to €209.6 million.

Nordex received 2,532MW of turbine orders in the first half of the year, with a combined value of €1.8 billion. Europe accounted for 80% of this order intake and Latin America the remaining 20%.

At the end of H1, the company had a total order book of €8.1 billion – up 6.5% from one year earlier. Its project segment accounted for €5.4 billion – up 1.8% from one year ago – of this, and its service segment for €2.7 billion – up 17.3%.

Nordex had scrapped its 2020 guidance due to the coronavirus pandemic in May, and in its Q2 earnings report reiterated that it can not assess the full-year impact of Covid-19.

Shares in the company fell 8.2% to €10.38 in early trading before partially recovering to €10.75 by 10.30am CET.

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