Gamesa profits dip but sales on the rise

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First quarter 2007 results from Spanish Gamesa reveal a 13.2% fall in net profits compared to the same period last year, despite international expansion spurring a 69% increase in sales to EUR 656 million. Gamesa describes the result as "acceptable," attributing part of the profit drop to "the learning curve" of recent turbine facility start ups in the US and China. Gamesa says supply chain delays also hit the bottom line, despite its focus on making components in-house. The group maintains its 16% profit growth target to end-2008, claiming the learning curve is levelling off and supply chains are being reinforced in China and America. The stock market seemed convinced. Gamesa's share value rose 2.22% to EUR 27.16 on release of the results. Turbine sales, at EUR 557 million, were 57% up on first quarter 2006. The US market absorbed 26% of the 485 MW installed, compared with 3% over 2006. Gamesa reports advance orders for 4,500 MW of turbines in the 2007-2009 period, 59% for Europe, 30% for the US, 11% for China. Sales of completed wind plant by Gamesa's project division were 63% up on first quarter 2006 to EUR 78 million, with Spain and the US accounting for 56% and 30%, respectively. Gamesa highlights this year's start-up of its 650 MW turbine facility in Tianjin, China. It will feed third party clients as well as projects emerging from Gamesa's 900 MW China prospects portfolio.

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