Vestas Posts Another Strong Quarter, Increases 2016 Guidance

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Danish wind turbine manufacturer Vestas has reported another strong quarter, enough so that it has increased its full-year revenue guidance, making shareholders very happy.

Published this week, Vestas’ interim financial report for the second quarter of 2016 revealed that the company had continued its long-term growth, with increased revenue and “satisfactory” wind turbine orders. Vestas posted a revenue of €2,557 million for the second quarter — an impressive 74% increase on the company’s revenue in the first quarter of 2016, and a more respectable 46% increase compared to the second quarter a year earlier. EBIT increased by €254 million to €399 million, with an EBIT margin before special items of 15.6%, compared to only 8.3% the same time a year earlier.

Vestas took in 1,790 MW of wind turbine orders during the second quarter, valued at €8.2 billion as of June 30. In addition to its increasing wind turbine order backlog, Vestas also has service agreements with contractual future revenue of €9.9 billion as of June 30.

All in all, Vestas’ combined value of future work stands at €18.1 billion — an increase of €1.2 billion over Q2’15.

Unsurprisingly, therefore, Vestas’ share price took a nice 10% jump on the back of the news.

“I am very pleased with Vestas’ strong second quarter performance,” said Anders Runevad, Vestas Group President & CEO.

“Our colleagues have executed well on a high activity level, which along with a favourable mix of projects contributed to Vestas achieving extremely solid results on revenue, EBIT margin, net profit, and free cash flow and with an order intake in line with expectations.

“We are upgrading the full-year guidance on revenue, EBIT margin, and free cash flow, and as a result of the strong performance we also continue delivering tangible shareholder value through the 2016 share buy-back programme that we are launching now.”

Specifically, Vestas has increased expected revenue to €9.5 billion for the full-year 2016, up from a minimum of €9 billion guided previously. Vestas further expects to achieve an EBIT margin before special items of at minimum 12.5%, up from a minimum of 11%, while its free cash flow is expected to be at minimum €800 million, up from €600 million.

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Joshua S Hill

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