Into profit and going for growth

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Significantly increased revenues on the back of a restructuring program begun in 2005 steered Repower Systems back to firm financial footing in 2006. At EUR 461.5 million, turnover was up 38% on 2005's EUR 335.1 million, while earnings before interest and tax (EBIT) rose to EUR 12.2 million compared with a loss of EUR 4.3 million the previous year.

In 2006, it tapped into "highly promising new markets with a new joint venture in China, a cooperation agreement in India and an initial supply agreement in the USA," says Repower's chairman Fritz Vahrenholt. The company forecasts "significant sales growth" to EUR 650 million for this year with an improved EBIT margin and has upped its 2008 sales target from at least EUR 850 million to EUR 900 million, marginally behind rival German turbine supplier Nordex, which is targeting revenues of EUR 1 billion in 2008.

Repower says its order book is the healthiest yet going into a new year. At the end of 2006 orders had been received for 478 turbines (933 MW) for a sales value of EUR 842.8 million compared to EUR 541.2 million at the end of 2005.

Last year, Repower delivered or installed 263 turbines totalling 492 MW, a 34% increase on the 201 turbines (366 MW) it delivered in 2005. Exports increased to 72.4% of completed sales, up from 32% in 2005. At the same time, sales of Repower's bigger machines are rising. Just 10% of its existing order backlog is for 1.5 MW units, while the lion's share of 89% is for 2 MW turbines. One order has been secured for its 5 MW model.

Repower expects to install a prototype of its new 3.3 MW onshore machine in 2008, ahead of serial production in 2009. Two types of rotor blade for the 2 MW machines are also being developed in preparation for planned in-house manufacture. Field tests for the blades are scheduled for spring and summer this year.

Capital increase

Continued strong growth is needed "to achieve economies of scale" and to build "a powerful international procurement management to further reduce our cost of materials ratio," says Vahrenholt. The company completed a capital increase a year ago, raising share capital by EUR 2.2 million and generated gross issue proceeds of EUR 82 million. A further increase through a new share issue at a subscription price of EUR 136 per share was approved last month. It will raise share capital by up to EUR 0.81 million to around EUR 8.9 million and generate around EUR 110 million. The money raised will be used in part to pre-finance big European offshore projects "for which Repower is at an advanced stage of negotiations," says the company.

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