Danish wind turbine manufacturer Vestas (DKK: VWS) has announced a return to profitability as it released its 2023 third quarter results.
The Copenhagen-based firm achieved a net profit of €28 million (£24.3 million) in the quarter, an improvement on the €171 million (£148.8 million) loss incurred in the same quarter last year.
Vestas recorded EBIT before special items of €70m, compared to a €127m loss in Q3 12 months ago.
Meanwhile, revenues increased from €3.9 billion to €4.4 billion, up 11% year-on-year.
A €71m loss for the year to date marks a stark turnaround from €1.2bn losses in the same period in 2022.
The heavy losses in 2022 were caused by high inflation and supply chain constraints in what Vestas said was a “challenging year” for the company.
Vestas CEO hails ‘positive momentum’ in Q3
Vestas chief executive officer Henrik Andersen said based on the results for the first nine months, the company remains on track to become profitable in 2023.
“Vestas’ positive momentum increased in the third quarter of 2023, and we continued the gradual improvement in our execution and profitability,” he said.
“In the quarter, we had an EBIT margin of 1.6%, which was achieved through higher gross margin and increased pricing on deliveries.”
Mr Andersen said the increase in revenues was driven by higher value of delivered projects, stable volumes and “continued solid service performance”.
Vestas said its quarterly intake of firm and unconditional wind turbine orders amounted to 4.5 GW, a 138% increase from third quarter 2022.
The value of the company’s combined backlog of wind turbine orders and service agreements reached €54 billion, an increase of €6 billion compared to the year earlier period and a “record high” for the company.
Mr Andersen said the result came despite “continued market design and permitting challenges” and with approximately 50 days left in 2023, the company remained “fully focused on becoming profitable again”.
Earlier this year, Mr Andersen had predicted wind supply chain disruption “to continue throughout the second half of the year”.
The positive results for Vestas contrast with a turbulent period for rival manufacturer Siemens Energy, with suggestions the troubled turbine maker may need a taxpayer-funded bailout from the German government.
Analysts react to Vestas Q3 results
Jefferies equity research analysts said Vestas had a “solid” third quarter result with “with improved project execution, easing supply chain disruptions and pricing starting to show”.
“Services margin was slightly below but still growing strongly,” Jefferies said.
“Orders are 5% below, driven by large EU offshore orders, with very strong onshore ASP (average selling point) at €1.05m/MW showing continued discipline.”
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