Danish group Vestas Wind Systems, the world’s premier wind turbine maker, released its third quarter earnings report for investors Thursday, and is showing strong and continued growth over the first 9 months of the year, as well as compared to a year previously.
Revenue and profit are both up, despite a drop in order intake for the quarter, leading Vestas to upgrade its guidance for the year.
“The third quarter of 2014 continued the trend with improvements in several operational areas and thus highlights that execution remains on track for our strategy, profitable growth for Vestas,” said Group President and CEO Anders Runevad. “Based on the expected delivery plan for the remainder of the year and the improved cost base, we raise our guidance on revenue, EBIT and cash flow.”
The news came less than a day after Vestas announced it had received a firm and unconditional order from First Wind for 100 of its V100-2.0 MW turbines, equating to 200 MW, for the South Plains project in Texas.
“South Plains is the fifth project Vestas has announced with First Wind since 2011. That record speaks to the depth and strength of the relationship between our two companies,” says Chris Brown, President of Vestas’ sales and service division in the United States and Canada. “Each wind project is different, and we have worked hard to bring the right technical and business solutions to each of First Wind’s developments. We’re very pleased to support First Wind’s success in the U.S.”
Despite order intake of only 1,170 MW, a drop of 24% for the quarter, Vestas still walked away with a healthy profit and year-long order intake. Revenue for the quarter was up 26% to €1,813 million from €1,442 million in the same quarter a year earlier. Profit was up as well, to €318 million from €213 million a year earlier.
Across the year, revenue sits at €4,437 million and profit at €762 million, up from €3,723 million and €440 million respectively compared to a year earlier.
Despite registering its lowest order intake levels for the whole year, Vestas is still up on the year. Order intake for Q1’14 was 1,188 MW, and 1,932 MW for Q2’14, dropping down to 1,170 MW in the third quarter. However, those strong early quarters have pushed the company to a total of 4,290 MW over the first 9 months of the year, compared to 3,832 MW a year earlier.
Guidance for the year was also up, given the company’s strong performance so far this year. Vestas has upgraded its guidance to €6.4 billion–€7 billion.
Days after the third quarter came to an end, Vestas announced that it would be stepping away from a 254 MW project in Brazil (a gap that Gamesa quickly filled), due to changes to Brazilian legislation which occurred after the contract had been inked. This sits as probably the most interesting thing to have happened over the past few quarters for Vestas, which has simply carried on doing what it has been doing for several years now — making money in wind energy. And while it will be interesting to see how the Brazilian contract plays in the fourth quarter earnings, given the company’s success so far this year (4,290 MW), one has to be excessively pessimistic to imagine the company reporting a sudden loss.