Germany

Germany

Wind Business: Weaker earnings forecast - Repower bucks credit crunch

German wind turbine manufacturer Repower booked higher sales and profits in its first fiscal quarter despite the global recession, but forecasts weaker earnings ahead due to tightening credit and project delays.

Repower achieved sales of EUR300.7 million in April-June, nearly 30% above the EUR231.8 million during the same period the previous year. Earnings before interest and taxes (EBIT) rose by a slimmer 5% to EUR10.7 million. The company sold 83 turbines totalling 170 MW in the first quarter, down from 138 units with a combined capacity of 276 MW in the same period of 2008. Sales rose despite the decline in turbines supplied because under accounting rules the company was able to book more revenue in relation to partially completed projects developed by clients - proceeds not reflected in the turbine transaction figures. Repower says it foresees a tougher business environment ahead marked by project delays, lower prices, Chinese protectionism and currency exchange risk caused by a trend toward project finance denominated in currencies other than the Euro. For the full year through March 2010 it now expects sales to fall at the lower end of a forecasted range of EUR1.4-1.5 billion.

At end-June, Repower's order backlog slid to 574 turbines totalling 1.2 GW, compared to 718 turbines the earlier year. The confirmed order volume totalled EUR1.45 billion, compared with EUR1.61 billion at the end of June 2008.

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