Vestas cuts 2013 shipment guidance

Wind turbine market-leader Vestas has cut its shipment guidance for 2013 due to weaker-than-expected order intake.

Vestas now says it expects to ship between 4GW and 5GW this year. It previously gave a guidance of 5GW. The company shipped 6.2GW in 2012.

The Danish group is forecasting revenues of “at least” €5bn this year, including service revenue, which is expected to grow to about €1bn. Today it reported 2012 revenue of €7.2bn.

Vestas sees a margin before tax and interest (Ebit) of at least 1% in 2013 and a positive free cashflow.

In 2012 the company posted an Ebit of €4m before special items, and a negative free cashflow of €359.

Last year Vestas recorded a total of €701m as special items, mainly due to write-downs.

It ended 2012 with a net loss of €963m, wider than the €166m deficit it posted for 2011.

Vestas says its fourth-quarter 2012 revenue showed more robust growth of 23% to €2.51bn, thanks to deliveries that were 10% higher, increased selling prices and better service revenues.

The company says the final quarter showed the first glimmers from the massive restructuring underway at the company throughout 2012.

Chief executive Ditlev Engel said: “The fourth quarter of 2012 is important because that was when the initiatives we implemented started to materialise.

"Ebit before special items more than tripled, and even though our free cash flow fell short of the original guidance, the free cash flow generated in the fourth quarter was the highest quarterly free cash flow we recorded for five years.”

In its year-end report, Vestas laid bare the extent of the upheavals at the company over the last 12 months.

It ended 2012 with 5,000 fewer employees than it began the year, a cut of 22%.

The Danish group sold one factory, shut another and put some other plants up for sale.

That all contributed to cost-savings of some €250m.

Bert Nordberg, the Vestas chairman, also insisted that the company's restructuring plans was bearing fruit, but said it had decided to take write-downs on its business of more than €500m "based on Vestas’ declining earnings and a more conservative view of the future world market for wind turbines".

Nordberg adds: "This is, among other things, due to the fact that we have chosen to put some factories up for sale as part of our new business model.”

The Vestas statement contained no immediate update on the company's talks over a partnership with Japan's Mitsubishi in its offshore business.

"As previously announced, Vestas has received inquiries from potential partners on the V164-8.0 MW turbine," it says.