Wind turbine maker Vestas' order intake blows forecasts away

Credit: REUTERS/Christian Charisius

Wind turbine maker Vestas on Thursday reported forecast-beating quarterly operating profit driven by a surprisingly strong order intake and growth in its service unit, where it now has roughly 43,000 turbines under maintenance.

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COPENHAGEN, Nov 7 (Reuters) - Wind turbine maker Vestas VWS.CO on Thursday reported forecast-beating quarterly operating profit driven by a surprisingly strong order intake and growth in its service unit, where it now has roughly 43,000 turbines under maintenance.

Vestas is in the midst of its busiest period on record as demand for renewable power sources grows in tandem with global efforts to combat climate change, while it is also grappling with higher costs and falling prices for its products.

"Although our service business continued to grow with high margins and the average selling price was stable in the quarter, our profitability remains impacted by tariffs and increased execution costs," Chief Executive Henrik Andersen said in a statement.

Vestas' order intake in the third quarter came in at 4,738 megawatt, well above the 3,412 MW expected by analysts, but the average selling price of 0.74 million euros per megawatt lagged a forecast of 0.76 million.

Vestas still expects revenue between 11 billion and 12.25 billion euros this year and an earnings for interest and tax (EBIT) margin before special items of 8-9%.

Operating profit before special items rose 55% to 429 million euros, topping the 351 million euro forecast by analysts in a Refinitiv poll. Its adjusted EBIT margin improved to 11.8% from 9.8% a year earlier.

On Tuesday, Vestas' main rival Siemens Gamesa delayed its 2020 outlook for an operating profit (EBIT) margin of 8-10% by two years as it faced lower prices for its turbines.

(Reporting by Stine Jacobsen; Editing by Jason Neely and Edmund Blair)

((stine.jacobsen@thomsonreuters.com; +45 21 56 90 10; Reuters Messaging: stine.jacobsen.thomsonreuters.com@reuters.net))

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