Denmark

Denmark

Back on track after winter dip -- Industry annual reports

The Danish wind industry barely managed to start effecting the reductions in working hours it announced this winter following the seasonal autumn surge in manufacturing before the global market picked up again, most recently boosted by an extension of the Production Tax Credit (PTC) for wind in the United States (page 24). Rotor blade manufacturer LM Glasfiber and turbine maker Vestas both warned of short-time weeks for 1700 and 1200 workers, respectively. But new orders have resulted in LM sending just 800 workers on training programs instead.

Positive annual reports for 2001 released last month by Vestas and NEG Micon, the country's two publicly traded wind turbine manufacturers, sent share prices on a steady upward trajectory, speeded by the PTC news. Releasing its annual accounts on March 13, Vestas announced expected orders of EUR 1.6 billion this year and EUR 2.2 billion in 2003, with a projected profit for 2002 of EUR 161.5 million. Turnover in 2001 reached EUR 1.3 billion, up from EUR 874.6 million in 2000. The sale of its share of Spanish Gamesa (Windpower Monthly, January 2002) added EUR 242.2 million to Vestas' turnover last year. Profit before tax was EUR 376.7 million.

A week earlier, on March 6, NEG Micon announced its best profit ever, EUR 27.6 million on a turnover of EUR 713.1 million, up from EUR 538.2 million in 2001. Growth in sales was particularly marked in Spain and Germany while today's optimism is directed not least at the United States. NEG Micon is this year projecting a turnover of EUR 807.3 million and a profit before tax of EUR 47.1 million.

The positive news similarly had its effect on the stock market and within two weeks the combined share value of both companies rose by over EUR 1.2 billion. By March 25, NEG Micon's share price had risen from around DKK 200 (EUR 27) to DKK 285 (EUR 38.5) for a DKK 10 share, while Vestas shares were trading at DKK 270 (EUR 36) for a DKK 1 share, also up from around EUR 27 earlier in the month.

Meanwhile the shares of competitor Nordex, at one time under Danish ownership, remain more or less static on the Neuer Markt division of the Frankfurt stock exchange at EUR 6.70, about the same value as at the beginning of the year. The poor share performance is despite the company reporting an increase in turnover of 39% to EUR 96 million, an improvement in profit of 42% to DKK 2.7 million (EUR 363,300) and growth in its share of the German market from 8.7% to 10.4%.

The fourth major turbine company on Danish soil, Bonus Energy A/S, is still privately owned. Its accounts for 2001, which have yet to be published, report an increase in turnover from EUR 242.2 million in 1999/2000 to EUR 430.6 million in 2000/2001, with profit rising from EUR 18.8 million to EUR 39 million.

Blade competition

Meantime, LM continues to hold 45% of the market for wind turbine blades even though Bonus and Nordex are following in the footsteps of Vestas and NEG Micon with their own blade manufacturing divisions. NEG Micon is stepping up blade production at its Isle of Wight works in southern England, including fabrication of a new lightweight wood-epoxy blade strengthened with carbon fibre. Despite all the competing blade production, LM is still expanding two facilities, in Denmark and in Spain, to keep pace with demand.

Vestas is also preparing new subsidiaries and factories in Australia, Asia, Germany, Scotland, France and Denmark and is considering setting up production in the US (page 24). Its plans for Spain and South America -- markets previously left to Vestas' former Spanish partner Gamesa -- remain under wraps.

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