Vestas' Q3 profits squeezed despite record turbine deliveries

Vestas CEO Henrik Andersen said the coronavirus pandemic continued to impact the Danish manufacturer in Q3

Vestas recently installed a prototype of its V162-6.0MW turbine in Denmark

Vestas’ operating profit fell slightly and its Ebit margin before special items was squeezed in the third quarter of the year, as the widespread impacts of the coronavirus pandemic continued.

This came despite its Q3 revenue growing 31% to €4.7 billion and the manufacturer delivering 6GW of turbines – a record for quarterly delivery capacity.

It reported firm, unconditional orders of 4.2GW in Q3, down 10% from last year. 

These orders were from all regions and were boosted by stable pricing, CEO Henrik Andersen.

Vestas’ turbine order backlog was worth €14.6 billion at the end of September, down from €16.5 billion one year earlier.

Meanwhile, it had service agreements with expected contractual future revenue of €19.3 billion, up from €16.3 billion one year earlier.

Despite continuing impacts from the coronavirus pandemic, the Danish manufacturer maintained its full-year guidance of €14-15 billion of revenue and an Ebit margin before special items of 5-7%. It expects to make total investments below €700 million, the figure it had initially forecast for spending this year.

Vestas had reissued its full-year guidance in Q2, as visibility improved amid the coronavirus pandemic.

CEO Andersen said: “Although uncertainty around Covid-19 will continue for the rest of the year, our sustained leadership in onshore wind energy and the acquisition of MHI Vestas Offshore Wind underline our progress towards becoming the global leader in sustainable energy solutions.”

Vestas recently agreed to buy out partner Mitsubishi Heavy Industries (MHI) from the two companies’ offshore wind joint venture, MHI Vestas. MHI is due to acquire a small stake in Vestas in return.

It expects to have positive free cash flow before acquisitions of subsidiaries and financial investments by the end of the year, despite having negative free cash flow of €451 million for the first nine months of the year.