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Senvion plots cost-of-energy-led path to 2019 growth

Germany-based wind OEM Senvion warned of “slightly lower” earnings in the period ahead as it lays the ground for a return to “profitable growth” in 2019 based on new market penetration and cost-of-energy reductions.

Senvion today posted revenues of €2.21bn for 2016, a 3.4% growth year-on-year, with an adjusted Ebitda profit margin of 9.3%.

As Senvion had already signalled, both 2016 and 2017 will be years of “transition” when it builds the ground “for profitable growth by 2019” as it expands its presence in new markets and works towards commercialising new products.

Senvion expects slightly lower revenues for 2017 in the range of €2bn to €2.1bn and “softer” Ebitda margins of 8%-8.5% as a result of near-term market trends, it said.

The company aims to return to “profitable, capital-efficient and international growth by 2019”, when it aims to achieve revenues of €2.6bn to €2.7bn, meaning a growth of around 24%-35% in revenues from 2017 levels.

Senvion CEO Jürgen Geissinger said: "The expansion into new markets is gaining momentum, with our latest turbines already receiving great response from the market.

Senvion plans 780 job cuts in bid to secure long-term future

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“For the future, we will keep penetrating new segments in our core markets and enter new markets, all based on a product philosophy which aims to reduce levelised cost of energy by 4% to 6% every year, whilst working on improving our organisational efficiency,” he added.

The group announced earlier this month it plans to cut 780 jobs as part of “an extensive programme to secure the company's long-term competitiveness”.

The cuts will mostly be at Senvion’s plants in Husum, Trampe and Bremerhaven in Germany, as the company works to deal with price pressures, and a shift in demand from established markets to growth regions in South America and Asia, it said.

Despite the prospect of short-term upheaval, Senvion highlighted several immediate positives in its full-year results.

During the fourth quarter from October to December 2016, Senvion reported its highest installation rate since 2013 with 697MW, out of a 2016 total of 1.76GW – the latter figure a 1% year-on-year increase.

Over the year, the company entered new markets in Scandinavia, Chile, and Serbia, in addition to signing a conditional offshore order for 203MW. In India, Senvion entered the market one year ahead of schedule due to the capital efficient acquisition of Kenersys assets and already was awarded with a 500MW framework agreement.

“These developments highlight the effectiveness of Senvion's strategy of entering and expanding in new markets as well as its competitive product portfolio for all wind classes,” said the company.

Senvion confirmed a firm order intake of €1.3bn last year, but expects to close €2bn or more firm in orders in 2017 “largely driven by new markets”.

“This would mean a growth of 53.9% and above in order intake compared to 2016 firm order intake is planned,” it said.

The 2016 net result for the group was a loss of €65.2m, compared to a loss of €106.6m reported year-on-year – although the figures are heavily skewed by effects related to the acquisition of Senvion in April 2015, meaning only limited comparisons are possible, said the company.