Vestas reports strong quarter but warns pain could follow

WIND turbine manufacturer Vestas increased its revenue in the March quarter, with increased order backlogs at an all-time high, however EBITA decreased significantly because of COVID-19.
Vestas reports strong quarter but warns pain could follow Vestas reports strong quarter but warns pain could follow Vestas reports strong quarter but warns pain could follow Vestas reports strong quarter but warns pain could follow Vestas reports strong quarter but warns pain could follow

Maintains suspended guidance

Mark Tilly

Journalist

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The Danish company said generated revenue for the quarter totalled €2.2 billion (A$3.7 billion), an increase of 29% compared to the same period last year. 

However EBIT before special items decreased by €97 million to €54 million year-on-year, with company CEO Henrik Anderson pointing to increasing execution costs and logistical challenges due to the pandemic, noting there could be further pain to come. 

Vestas has suspended guidance, something even most of the world's hard hit oilers have avoided. 

"Across the company we have done well to ensure business continuity during the pandemic, but the uncertainty around the full-year impact prevails and our guidance therefore remains suspended," he said. 

The company also laid off 400 workers across its projects in Europe because of the crisis. 

However the quarterly intake of firm and unconditional wind turbine orders reached 3.3 gigawatts, with the order backlog valued at €15.9 billion as of March 31 and had service agreements with expected contractual revenue of €18.2 billion.

The combined future projections combined totalled €34 billion, an increase of €5.8 billion compared to the same period last year. 

"The global demand for wind energy remained strong in spite of the COVID-19 pandemic's continuing impact on societies and operations across all continents," Anderson said. 

"As the global pandemic and economic crisis move into their next phase, Vestas continues to ensure business continuity and that renewables become a key part in restarting the global economy."

The company's liquidity also increased from €876 million in the 2019 March quarter to €919 million in the same quarter this year. 

Earlier this week, analyst group Wood Mackenzie highlighted the renewables sector's resilience amidst the economic carnage the COVID-19 pandemic is wreaking. 

"Investor interest in power and renewable energy remains high," WoodMac said. 





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