Vestas’ revenue and Ebit fell in the first quarter of the year as it faced logistical challenges and supply chain bottlenecks in key markets due to the coronavirus pandemic, according to its CEO.
However, the turbine manufacturer recorded a record-high combined order backlog – wind turbine orders and service agreements – by the end of the quarter, with the majority of this being in future operations and maintenance (O&M) agreements.
CEO Henrik Andersen also insisted that the company would “catch up” after a slow start to 2021, having not announced a new turbine order until 3 February.
The company maintained its guidance for the year.
Andersen said: “Although we have started the year a bit slower than expected, we remain positive we will catch up throughout the rest of the year by maintaining a strong focus on executing our 2021 goals and mid-term strategic priorities.”
Vestas’ revenue was down 12% to €1.9 billion, while Ebit before special items fell by €17 million to minus €71 million in the first quarter of 2021.
This gave it an Ebit margin before special items of -3.6%, down 1.2 percentage points from one year earlier. Special items in the quarter were primarily related to the integration of MHI Vestas Offshore Wind.
It also recorded a €57 million net loss in the quarter, compared with an €80 million loss one year earlier.
Andersen added: “Logistical challenges and supply chain bottlenecks were, however, amplified by Covid-19 restrictions in strategic markets and extraordinary events, and as a result our Ebit margin decreased year on year.”
Meanwhile, Vestas’ free cash flow rose to -€898 million, compared with -€920 million one year earlier.
New orders down but backlog up
Vestas recorded 2,016MW of firm, unconditional orders in the first three months of the year – 39% lower than the order total in Q1 2020.
Its turbine order backlog grew to €19.4 billion as of 31 March, while it ended the quarter with service agreements with an expected contractual future revenue of €25.3 billion.
The combined order backlog of wind turbine orders and service agreements of €44.7 billion, was up 10.6% from one year earlier and is an all-time high for the company.
Vestas maintained its guidance for the full year of €16-17 billion of revenue, including service revenue, which is expected to grow by 15%.
It expects an Ebit margin before special items of 6-8%, with a service Ebit margin of around 24%.
The manufacturer expects to invest about €1 billion in 2021, excluding the acquisitions of subsidiaries, joint ventures, associates and financial investments.