Growth limited by component gap -- Repower out of the red

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German turbine manufacturer Repower Systems sold 267 MW in the first half of 2006 for EUR 178.5 million, compared with 123.5 MW for EUR 121.5 million in the same period in 2005. The performance has pulled the company out of the red. Earnings this year before interest and tax (EBIT) amount to EUR 2.4 million to the end of June, compared to a deficit of EUR 12.7 million in the first half of 2005.

Repower notes sales would have been higher but for postponement of some projects from the second to the third quarter "as the supply of key components, particularly gear systems, rotor blade bearings and hubs, was not carried out in line with contracts." Repower fears a continuation of the component supply bottleneck due to the shortage of cast and forged parts affecting the mechanical engineering sector worldwide. But it retains its earlier forecast for sales of EUR 450 million and EBIT of EUR 11-13.5 million for 2006 as a whole.

Predicting growth

Repower predicts "a strong growth course" in 2007 and 2008. Its order book in mid-2006 stood at EUR 725.1 million, compared with EUR 502.3 million for the same period last year. Sales of EUR 650 million are expected for 2007 and about EUR 800 million for 2008, says the company.

Repower is owned 29.6% by French nuclear group Areva, 25.4% by Portuguese construction group Martifer, with the remaining 45% of shares publicly listed. It is a modest player in its German home market, accounting for a 3.5% share of the 880 MW of newly installed capacity in the first half of 2006, behind Vestas, Enercon, GE Energy, Nordex and Siemens Wind Power. Its focus is increasingly on foreign markets, most recently with a joint venture to build 2 MW turbines in China, for which contracts were due to be signed at the end of August. Repower North (China) is owned 50.01% by Repower, with Chinese engineering company North Heavy Industries Corporation holding 33.34% and British specialist investment company Honiton Energy holding the remaining 16.65%.

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