Two Germans still in the red

Germany's two listed wind turbine suppliers, Repower Systems and Nordex, remain in the red. Repower reports a loss of EUR 12.4 million for the first nine months of 2005, a bigger deficit than the EUR 7.9 million loss in same period last year despite a sharp increase in sales to EUR 195.1 million compared with EUR 130.6 million by the third quarter of last year. Nordex, which was due to issue its third quarter report on November 29, expects to make an operating loss of EUR 2 million for the whole of 2005. It maintains its full year sales forecast of EUR 280 million compared with EUR 214 million in 2004.

Both companies are implementing restructuring plans and both report healthy order books. Nordex reports order receipts for EUR 279.9 million in the first nine months compared with EUR 174.4 million in the same period last year. Repower says it received orders for EUR 561.2 million in the first three quarters, compared with EUR 353.8 million in the same period of 2004.

Repower's losses are due to continued restructuring costs, a "shortage of central components," and an unwanted fiscal surprise. After selling a wind station to GE Capital as part of a portfolio deal, Repower's expected return of EUR 3-3.5 million dropped to EUR 1.9 million "for tax reasons." Component shortages have also required the re-negotiation of supplier arrangements, with targeted savings in procurement missing the mark by "up to EUR 4 million." Repower says this shortfall could be partially compensated "by exceeding our original objective of installing 200 turbines in 2005 thanks to the sound market situation."

If all goes well, turnover in 2005 will be 5-10% up on 2004's EUR 320.7 million, says Repower. But bad weather can be a major risk factor in completing installations in the fourth quarter, warns the company.