Wind giant Vestas reports $A139 million loss in “challenging environment”

Danish wind turbine manufacturer Vestas Wind Systems has reported a net loss of €85 million ($A139.5 million) for the first six months of 2020, amidst what the company describes as a “challenging environment” and ongoing uncertainty around Covid-19.

Vestas reported its interim financial report for the second quarter of 2020 on Tuesday, announcing an increase in revenue of €3,541 million, a 67% improvement on the same quarter a year earlier.

But the company’s intake of new wind turbine orders fell sharply in the second quarter, totalling 4,148MW in that period, compared to 5,696MW of new orders in the second quarter of 2019. And on the balance sheet, the company recorded a Q2 loss of €5 million, compared to a profit of €90 million in the same quarter a year earlier.

Vestas turbine deliveries were not as severely hit, however, with deliveries to the Americas amounting to 2,563MW, up from 617MW in Q2 of 2019, thanks to an increase in deliveries to the United States and Brazil. Australia also played its part, with deliveries to the Asia Pacific totalling 598MW for the quarter, up from 319MW.

“The COVID-19 pandemic continued to impact the renewable energy industry and the global economy in the second quarter of 2020,” said Group President & CEO Henrik Andersen in a statement.

“In these challenging circumstances and without state aid, Vestas’ almost 26,000 employees have performed strongly, growing our revenue by 67% compared to the same quarter last year and achieving an order intake of 4.1GW as well as a record high total order backlog of more than €35 billion.

“The global pandemic and economic downturn will continue to create uncertainty in 2020, but we remain confident in our ability to ensure business continuity across our value chain,” Andersen said.

Despite the topsy-turvy nature of its financials, Vestas nevertheless saw itself in a strong enough position to reinstate its previously suspended yearly guidance, with an expected full-year revenue in the range of €14-€15 billion.

The company’s EBIT margin has been updated down from between 7-9% to between 5-7%, while the company’s total expected investments for the year will fall from approximately €700 million to below €700 million.

Vestas’ decision to reinstate original guidance highlights the company’s strong confidence in its ability to weather the COVID-19 storm and come out the other side in a similarly strong position to which it entered. Much of this confidence is based in the company’s belief that renewable energy development will remain a priority for countries around the world, particularly as they look for ways to bolster their COVID-19-shaken economies.

However, the company was quick to note that its reinstated financial guidance was “based on assumptions that are subject to greater uncertainty than under normal circumstances, due to COVID-19.”