Fast growth and improved profits -- Repower and Nordex results

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Germany's two publicly traded wind turbine manufacturers, Repower Systems and Nordex, both report galloping growth as the headline news in their annual results for 2007. Repower plans to double its annual production capacity to 2600 MW within the next two years while in preliminary results, Nordex reports a 45% increase in sales last year.

Repower, which has changed its financial year to start April 1 to bring it in line with the business year of its main shareholder Suzlon, has allocated around two-thirds of its EUR 86 million investment budget on construction of new production facilities and expansion of existing plant. This adds to the EUR 45.7 million it spent in the 2007 fiscal year on its production hall in Bremerhaven for series production of 5 MW offshore turbines and the manufacture of rotor blades. In 2006, investment in production facilities was EUR 25.4 million.

The expansion plans come on the back of strong results for 2007, when sales increased 48.2% to EUR 690.2 million from EUR 458.8 million in 2006. Earnings before interest and tax (EBIT) were EUR 28.2 million, a 131.5% improvement on the 2006 profit of EUR 12.2 million, says the company. Its order book is also looking healthy, with 1298 MW on the books at the end of 2007, representing sales of EUR 1.3 billion, up from 933 MW and EUR 842.8 million at the end of 2006.

This year it predicts an EBIT margin of 5.5-6.5%, up from 4.2% in 2007 and 2.6% in 2006. The company recently bagged its first major order of the year from Italian energy company Enel for 84 MW to be delivered for wind stations in France in the second and third quarter of 2009. For the 2009/10 financial year, it is forecasting a sales growth of 40-50% and "a further increase in the EBIT margin."

Nordex surge

Nordex confirms an already reported massive leap in sales that puts it "on track" to meet its revenue targets of EUR 1 billion in 2008 and EUR 2.5-4 billion in 2011. Sales last year were EUR 747 million, 45% up on the EUR 514 million achieved in 2006. As with Repower, EBIT jumped, in Nordex's case by 142% to EUR 40.1 million from EUR 16.6 million the previous year. The profit margin improved to 5.4% of turnover, up from 3.2% in 2006. "The surge in profit was driven by economies of scale and the greater profitability of projects completed," it says.

Orders in the pipeline are up 140% to EUR 2.9 billion compared with EUR 1.2 billion in 2006. Of these, EUR 1 billion are firm orders, with the remaining EUR 1.9 billion being conditional. "This is fully sufficient to ensure Nordex can meet its sales targets in full, both in 2008 and 2009, based on sales growth of 50% per year," says the company. Forecasting 2008 sales to come in at EUR 1-1.2 billion, Nordex predicts an EBIT margin of 6-8%, while in 2011 the margin could reach 9-12%.

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