Gamesa says growth path resumed

Spanish wind group Gamesa claimed the first quarter of 2014 confirmed it is back on the growth trail against a background of “rising global demand”.

Gamesa delivered a net profit of €17m in the January-March period, more than double the €7m it posted at the same stage last year, on sales 17% higher at €573m.

At an operating level, the Spanish company saw a 58% increase in earnings before interest and tax (Ebit) to €34m. The Ebit margin grew to 6% from a year-ago 4.4%.

The profitable quarter came on the back of 567MW-worth of sales, a 27% uplift on the 2013 first quarter.

Gamesa said that figure is in line with its 2014 guidance of 2.2GW-2.4GW and reaffirms "the return to growth that began in the final quarter of 2013”.

Order intake in the quarter doubled to 496MW bringing the total order book to 1.73GW – 20% higher than at the end of March 2013.

The company said its geographical diversity is key to its return to growth.

The importance of non-European markets was underlined in the quarter, with 33% of the total coming from India and 37% from Latin America. A recovering US delivered 21% of the total.

Europe and the rest of the world were flat at 7% – although Gamesa said this should improve during the year.

It also did business in emerging wind markets as diverse as Turkey, Finland and Sri Lanka.

The Spanish group saw its O&M business deliver 21.5% more revenue in the quarter with €104m.

The wind group said if 2013 was the year it reestablished profitability, this year is about resuming growth.

Gamesa said: “This growth in business volume and sales was achieved in a context of rising global demand following the decline during 2013."

In a conference call with financial analysts – responding to a question from Recharge Insight director Robert Clover – Gamesa executives said negotiations over a planned offshore wind joint venture with Areva of France are proceeding as planned.

"We hope significant agreements will be established over the next few months."

Gamesa officials were also sanguine over any competition from a future Alstom under the wing of either GE or Siemens, saying it should not affect the Spanish group's ability to meet its own strategic objectives.