Going public with red figures

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Vestas Wind Systems of Denmark, the wind power industry's largest company, is going public -- despite reporting a loss of DKK 18 million for 1997. Vestas announced the long awaited flotation on March 23 at the same time as releasing the company's annual report. A listing on the Danish stock exchange, now scheduled for May, has been under discussion at Vestas since 1994.

A 24% increase in sales of megawatt in one year, an increase in turnover of 34%, and a 24% share of the world wind power market is behind Vestas' decision to go public now, reports Vestas director Johannes Poulsen. "A continued controlled growth requires capital to maintain the company's strategic and economic goals and in this regard we find a stock exchange listing to be appropriate," he says.

A net turnover of DKK 1953 million in 1997 would have resulted in a profit of around DKK 121 million were it not for an extraordinary write-off of DKK 150 million, owed to Vestas by Vestas RRB India Ltd. Vestas owns 48% of the joint venture company. Spiralling interest rates in India pulled the carpet from under the wind industry shortly after Vestas RRB had taken delivery of a large order from Denmark. Poulsen describes the decision to write-off the DKK 150 million as "pessimistic," but better than running the risk of giving future shareholders a negative surprise.

Vestas sales in 1997 reached 383 MW, up from 308 MW in 1996. The DKK 18 million loss follows yearly increases in profit from DKK 49 million in 1995 to DKK 90 million in 1996.

Vestas has orders or is tipped to supply wind turbines for well over 250 MW of major projects, including 32 MW bound for New Zealand, 56 MW for Italy, 50 MW for Morocco, 20 MW for France, 110 MW for Texas and 11 MW for Minnesota. Of the most recent orders, the 56 MW for Italy is being delivered to two separate customers: wind developer Vento Power Corp (Windpower Monthly, December 1997) is taking delivery of 33.6 MW and 22.8 MW is for large industrial corporation, Savigliano. All 56 wind turbines are being installed in the same area south of Naples where they will supply power to around 20,000 households, says Vestas' Tom Pedersen.

At the close of 1997 Vestas employed 1295 staff plus 430 in joint venture companies in Spain and Italy. The company is owned 83% by Vestas Wind Systems Holding, part of the Dutch ABN-AMRO group.

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