TPI Composites has withdrawn its financial guidance for the full year citing coronavirus pandemic impacts on its global wind turbine blade manufacturing operations.
The world's only major independent blade maker said it was grappling with uncertainty related to the rapidly evolving nature, magnitude and duration of the Covid-19 outbreak and variety of measures implemented by world governments to address its effects.
“As a result, although customer demand currently remains strong, TPI cannot currently forecast or quantify with reasonable accuracy the full duration and financial magnitude of the impact of the Covid-19 pandemic,” the US company said.
TPI executives will provide an update on how the coronavirus is impacting the company’s liquidity, business operations, financial condition and results of operations in its first quarter earnings release and subsequent 7 May call with analysts.
In February, TPI released 2020 financial guidance for $1.55-1.65bn net sales, $100-125m adjusted EBITA and 80-85% utilisation at its plants. That excluded any potential coronavirus impacts that later began manifesting themselves in India, Mexico, Turkey and now the US.
Research group Wood Mackenzie estimates Covid-19 could cut global wind production capacity by 20% this year.
On Tuesday, TPI resumed limited output at its 3GW capacity Chennai, India, blade plant which had been operating since early this month with a “skeleton crew”. The 1.9GW Matamoros facility in Mexico will continue to temporarily operate at reduced capacity through 31 May due to the federal government extending its “sanitary emergency” order and demands from the union there, TPI said in a US regulatory filing.
In Izmir, Turkey, where TPI has operated since 2012, normal plant production levels have resumed after operating at 50% capacity during the first half of April primarily due to certain applicable government-mandated stay at home orders in response to Covid-19. In China, production is normal at the 3.7GW facility in Yangzhou.
On Thursday, TPI announced it plans to voluntarily pause production at its Newton, Iowa, manufacturing complex until the middle of next week in order to do another “deep clean” there and to implement a more rigorous Covid-19 testing plan for employees there in collaboration with the state.
Last week, 28 new cases of Covid-19 were found in the workforce and TPI says it “proactively reached out” to the office of Governor Kim Reynolds to discuss establishing an enhanced testing regime.
Employees will be paid during the production pause and TPI also plans to provide protective masks for their family members for use at home.
TPI has 52 dedicated blade production lines and is targeting 20% share of the global blade market. Present volume under long-term contract is Vestas (46%), GE Renewable Energy (27%), Nordex (13%), Siemens Gamesa (10%) and Enercon (4%).