Mission accomplished: wind turbine maker Vestas returns to profit with order boost

Mission accomplished: wind turbine maker Vestas returns to profit with order boost | Windpower Monthly

The 2023 figure was at the upper end of its guidance and significantly up on its -8% margin, posted in 2022.

After heavy losses in 2022 and a tough first nine months to 2023, Vestas defied the odds by returning to profitability last year, thanks in part to a “record-breaking” fourth quarter for the firm, which saw orders reach 8.2GW and pretax profits of €173 million, compared to a loss of €480 million in the same period a year ago.

The firm noted it was able to pay employee bonus for the first time in four years.

Before special items, Ebit for 2023 was €231 million compared to a loss of €1.15 billion in 2022, while 2023 Ebitda was up to €1,028 million, up from a loss of €63 million in 2022.

Vestas achieved its ‘back in black’ goal for 2023 and saw pre-tax profits rise to €102 million (compared to a 2022 pre-tax loss of almost €1.7 billion while net profits reached €78 million (up from a net loss of nearly 1.6 billion in 2022).

Record orders

Orders for the year set a company record at 18.4GW, Vestas said, while revenue was up to €15.4 billion (up 6% from £14.5 billion in 2022) - which was driven by higher pricing and continued service growth. Total investments stood at €823 million.

Its order book across the group increased to €60.1 billion, which was driven by strong growth in the US, as well as EMEA and Brazil.

Cautious optimism

Vestas’ posted a positive outlook for 2024, but Henrik Andersen, CEO of Vestas remained cautious. “Our performance in 2023 was helped by the improving business environment, but continued geopolitical volatility as well as slow permitting and insufficient grid build-out across markets are expected to cause uncertainty in 2024,” he said.

In a conference call, he praised permitting progress in some countries, notably in Germany and the UK. “I can't praise the government's there enough for actually sitting themselves at the table” to drive acceleration, he said. “It's really positive to see in a country like Germany that we are in excess of probably five gigawatts in onshore permitting annually”.

Forecasts

Revenue for 2024 is expected to be €16-18 billion, including service revenue. It expects to achieve an ebit margin before special items of 4-6%, while total investments are expected to amount to around €1.2 billion in 2024. The service segment is expected to generate ebit before special items in 2024 in the range of €800-880 million.

“Our strategic path towards our long-term ambitions is clear, and our focus remains to stay disciplined to continue building our momentum and execute as strongly as possible,” Andersen added.