Vestas to 'intensify' cost savings, reports third-quarter loss
Danish wind turbine giant Vestas unveiled plans for more job cuts next year as it reported a third-quarter loss.
The company says the “intensification” of its cost-cutting programme will see it save an additional €150m ($193m) in 2013, which will bring the annual cost-savings to €400m since the end of 2011.
The company now expects to shed an extra 2,000 jobs next year, leaving it with a global staff of 16,000.
The group says its current job cuts are proceeding ahead of schedule and it expects to have 18,000 staff by early next year, 1,000 less than predicted. At the start of this year it employed about 22,700.
The costs savings will come “through divestments, continuation of the hiring freeze and some additional layoffs,” Vestas told investors as it unveiled its latest quarterly financial report.
Vestas made a third-quarter profit of €13m before interest and tax (Ebit), against a €92m loss at the same stage last year.
But after special items such as write downs to development projects and other assets were taken into account, the company posted a negative Ebit of €140m.
Its net loss was €175m, worse than last year's €60m. Revenues were €1.99bn, 49% ahead of the same stage in 2011.
The company posted a negative free cash flow of €142m, down from a positive €276m at the same stage last year, which Vestas' lenders are likely to view as an alarming sign.
The company says it does not now expect to return to a positive free cash flow for the full-year, “due to weaker expectations for the 2012 order intake, and uncertainty on the exact timing of cash inflows and outflows during the last weeks of 2012 and the first weeks of 2013.”
Order intake was 401MW in the third quarter and Vestas’ backlog stood at €8.3bn by the end of September.
Vestas is retaining its full-year guidance of an Ebit margin before special items of 0-4% and revenue of €6.5bn-8bn.
It still expects to ship 6.3GW of turbines this year and 5GW in 2013.