Global wind power giant Vestas continued to pile on orders to amass a record backlog in the first quarter of the year, but posted a loss as it was hit by market pressures exacerbated by the coronavirus pandemic.

The Danish group posted a net loss €80m, reversing a 2019 Q1 profit of €25m.

Vestas saw a loss before interest and tax (Ebit) of €54m ($58.8m) in the January to March period, down from a €97m profit in the first quarter of 2019, on revenue 29% higher at €2.235m. Ebit margin fell to negative 2.4% from 2.5% a year earlier.

CEO Henrik Andersen said Vestas was “negatively impacted by the delivery of low-margin projects, while we also incurred increased execution costs from logistical challenges and supply chain bottlenecks, which were further amplified by the pandemic”.

But the global onshore wind number one also carried on pulling in the orders, with 3.3GW more booked in the first quarter, a 10% increase on last year's Q1. The group’s combined turbine and service backlog reached a record €34.1bn, up €5.8bn from a year ago.

The closely-watched average selling price (ASP) for its turbines dipped to €0.72m/MW in the first quarter, from €0.81m/MW a year earlier and €0.79m/MW in the prior quarter. But Vestas said once the effect of business in the Chinese market was stripped out, the trend remained stable.

The Vestas service operation continued to thrive in the quarter, delivering 12% organic growth and a 26% Ebit margin.

Vestas in April suspended its full-year guidance due to the uncertainties around coronavirus, a position it maintained. But the group said that “according to its current judgment” meeting the initial guidance on revenue and Ebit margin before special items “is still possible”.

Andersen said: “In the first quarter of 2020, the global demand for wind energy remained strong in spite of the COVID-19 pandemic’s continuing impact on societies and operations across all continents.

“In this environment, Vestas delivered increased revenue and order intake year on year, continued strong service performance, and a record high order backlog of more than €34bn that provides us with stability in the current period of high uncertainty.”

Wind

Vestas posts first quarter loss as coronavirus adds to market pressures