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Sales and profits grow at super-busy wind giant Vestas

Turbine OEM says tariffs and costs still loom amid 'unprecedented high activity levels'

Vestas grew sales and profits in the third quarter of the year amid “unprecedented high activity levels” and a bulging order book at the world’s largest supplier of onshore wind turbines.

The Danish OEM posted revenues of €3.65bn ($4bn) for the July to September period, up 30% on the same quarter last year, with an operating profit of €429m, up from €276m. Its Ebit margin rose to 11.8% from a year-earlier 8.4% and net profit almost doubled to €303m.

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Vestas booked 4.74GW of turbine orders in Q3 – a higher than expected figure that included 2GW of unannounced orders not revealed at the end of the quarter. Average selling price remained stable quarter-on-quarter at €0.75m/MW.

CEO Henrik Andersen highlighted a “stellar” performance by Vestas' ballooning service business, which grew revenues by 8% year-on-year and had 91GW of turbines under its wing by the end of Q3.

Service is also delivering Ebit margins in the high-twenties-percentage range – 28.3% in the latest quarter. “Customers are asking for longer and longer commitments,” said Andersen.

Andersen added: “Our order backlog increased to a record-high €32.8bn, which corresponds to a 38% increase year-over-year and underlines the continued strong global demand for Vestas’ wind energy solutions.”

However, Andersen warned “profitability remains impacted by tariffs and increased execution costs”.

Vestas shares spiked upwards by 12% by late morning in Copenhagen, as the Q3 results struck a markedly different tone to the first and second quarters, when profitability came under pressure.

"This quarter has actually proved that we can execute this type of volume."

The wind OEM had said the second half would show the company delivering its massive order book. “This quarter has actually proved that we can execute this type of volume,” finance chief Marika Fredriksson told Recharge in an interview.

The MHI Vestas offshore wind joint venture saw revenue dip to €399m from €633m a year-earlier, suffering in comparison with a very busy Q3 in 2018.

Fredriksson said the growing international focus on offshore wind and increasingly supportive governments bodes well for the sector, despite negative comments from some quarters after Orsted's recent downgrade of production forecasts.

Note: update adds details, comments

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