Vestas Reports Drop in Earnings in Q1 Results

Denmark-based turbine manufacturer and wind energy solutions provider, Vestas, recently issued its financial results for the first quarter (Q1) of 2019.

The financial report revealed that in the first quarter of 2019, the company generated revenue of EUR 1,730 million, marking an increase of 2 percent compared to the same period last year. However, the Earnings Before Interest and Taxes (EBIT) before special items decreased by a massive EUR 83 million or 66 percent from last year to EUR 43 million. The EBIT margin was 2.5 percent compared to 7.4 percent in the first quarter of 2018 and free cash flow amounted to EUR 876 million compared to EUR 587 million in the first quarter of 2018.

The intake of firm and unconditional wind turbine orders amounted to 3,004 MW in the first quarter of 2019.

Group President & CEO Anders Runevad said, “The strong global demand for wind energy continued in the first quarter of 2019 with Vestas growing its order intake with 84 percent to 3 GW and reaching an all-time high order backlog of EUR 28 billion. While underlying prices remain fairly stable and our Service business continues to grow in both revenue and profit, our results were as expected negatively impacted by orders received during the price decline in 2017. Furthermore, external factors such as tariffs and raw material prices increased the cost as projected in the quarter. With activity levels planned to be significantly higher in the second half of 2019, we leverage our market-leading position to ramp up for executing an extraordinarily busy 2019, while introducing new solutions that accelerate the energy transition.”

Further, the company reported that the value of the wind turbine order backlog amounted to EUR 13.3 billion. In addition to the wind turbine order backlog, the firm also had service agreements with expected contractual future revenue of EUR 15 billion at the end of March 2019. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 28.3 billion – an increase of EUR 6.7 billion compared to the year-earlier period.

The company maintains its 2019 guidance on revenue of EUR 10.75 billion -12.25 billion, EBIT margin before special items of 8-10 percent, and total investments of approximately EUR 700 million.