Vestas, dedicated to the manufacture and sale of wind turbines, presented this Wednesday a net loss of 884 million euros in the first half.
The result is explained by problems in the global supply chain, inflation, asset impairment losses and the costs derived from Vestas’ withdrawal from the Russian market due to the war in Ukraine, which has led to a loss of 367 millions.
Vestas, which had earned 19 million net in the same period of the previous year, presented a negative net operating profit (ebit) of 1,041 million.
In the first half of 2021, the EBIT had registered a positive value of 18 million euros (18.4 million dollars).
The turnover amounted to 5,790 million (5,913 million euros), 5% more.
The power produced was 7,727 megawatts, 25% less, and the installed power, 5,376 megawatts, 6% less.
“The first semester was marked by geopolitical uncertainty and problems in the supply chain that have pushed up costs and caused an energy crisis,” Vestas CEO Henrik Andersen said in the balance, calling for greater political support for the renewable energy.
In the second quarter, the net loss was 119 million euros, compared to a profit of 83 million a year ago.
Ebit went from a profit of 94 million to a loss of 147 million. Revenues amounted to 3,305 million, 7% less year-on-year.
The power produced was 3,758 megawatts, 35% less, and the installed power, 3,140 megawatts, 17% less.
Quarterly revenue of EUR 3,305m with an EBIT margin before special items of (5.5) percent. Wind turbine order intake of 2.2 GW with a continued strong backlog of EUR 18.9bn at higher pricing. Full-year guidance maintained.
In the second quarter of 2022, Vestas generated revenue of EUR 3,305m – a decrease of 7 percent compared to the year-earlier period. EBIT before special items amounted to EUR (182)m, resulting in an EBIT margin before special items of (5.5) percent, compared to 2.7 percent in the second quarter of 2021.
Free cash flow* amounted to EUR (362)m compared to EUR 183m in the second quarter of 2021.
The quarterly intake of firm and unconditional wind turbine orders amounted to 2,153 MW, and the value of the wind turbine order backlog was EUR 18.9bn as at 30 June 2022. In addition to the wind turbine order backlog, at the end of the quarter, Vestas had service agreements with expected contractual future revenue of EUR 31.3bn. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 50.2bn – an increase of EUR 2.1bn compared to the year-earlier period.
Group President & CEO Henrik Andersen said: “The first half of 2022 was characterised by geo-political uncertainty and supply chain disruptions that have caused costs to increase and an energy crisis to unfold. This development underlines the urgent need for a sustainable energy transition and drives stronger policy support for renewables across the globe but also creates a highly challenging business environment that negatively impacts Vestas’ financial results. In this environment, we achieved a revenue of EUR 3.3bn in the second quarter of 2022, and in accordance with our guidance for the full year, profitability remained challenged with an EBIT margin of (5.5) percent. In the quarter, our Service revenue grew 12.5 percent year-on-year, but was negatively impacted by one-offs related to a few projects in specific geographical areas. We reinforced our onshore leadership with an order intake of 2.2 GW and an average selling price on onshore wind turbines of EUR 0.96m/MW, a 22 percent increase year-on-year. The sustained price increases show we maintain the discipline to protect value creation and pave the way towards our profitability target. We continue to execute on our strategy to ensure Vestas continues to lead the energy transition and is ready to profitably grasp future growth. Everyone at Vestas is doing a great job in very tough circumstances, and we remain thankful for the ongoing support from our customers and partners.”
Key highlights
Sustained price increases continue to pave the way towards profitability target
Maintaining the discipline to protect value creation.
Order intake of 2.2 GW
Wind turbine order backlog remains high at EUR 18.9bn.
Revenue of EUR 3.3bn
Revenue decreased by 7 percent year-on-year caused by delay of offshore project.
Profitability negative in accordance with outlook revised on 1 May
EBIT margin of (5.5) percent driven by supply chain disruptions and cost inflation.
Positive policy development in the USA and Europe
Despite evidence of an energy crisis, still a lack of permitting progress.
*) Excl. acquisitions of subsidiaries, joint ventures, associates, and financial investments.
Information meeting (audiocast)
On Wednesday 10 August 2022 at 10 am CEST (9 am BST), Vestas will host an information meeting via an audiocast. The audiocast will be accessible via vestas.com.
