Turbine-maker Vestas sees favourable winds despite low oil prices

GMT 14:55 2016 Wednesday ,10 February

Arab Today, arab today Turbine-maker Vestas sees favourable winds despite low oil prices

Vestas net profit for the year rose to 685m
Copenhagen - AFP

Danish wind turbine maker Vestas Wind Systems posted Tuesday a full-year profit for 2015 that beat forecasts and despite low global oil prices expects revenues to continue rising this year.

"The wind power industry has matured in recent years and we are now seen as one of the main contributors to a more sustainable power generation footprint," chairman Bert Nordberg said in a statement.

Net profit for the year rose to 685 million euros ($766 million) from 392 million euros last year, beating a Bloomberg analyst consensus of 637 million euros.

Revenue grew 22 percent to a record 8.42 billion euros -- and is expected to reach at least nine billion euros this year, which would be an increase of nearly 7 percent.

Order intake rose by 41 percent last year to 8.2 billion euros, and the order book stands at just over one year of work.

"We have seen good activity levels across all regions," chief executive Anders Runevad said, noting that Vestas' profitable service business grew 20 percent.

The board recommended raising the dividend by 75 percent to 6.82 kroner (1.34 euros, $1.50).

Runevad took the helm in August 2013 after the company had posted nine quarterly losses in a row.

The Danish company had to cut its workforce by almost a third as the financial crisis prompted governments to cut subsidies for renewable energy.

"Vestas is earning more than expected from its operations," Sydbank analyst Jacob Pedersen told Danish news agency Ritzau, as the profit margin before interest and taxes widened to 10.2 percent from 8.1 percent.

"They have cut costs significantly," said Michael Friis Jorgensen, an analyst at Danish financial services group Alm. Brand Markets.

If oil prices remain at their low levels it could become a problem for the company in the future as it would make wind power less competitive and hit orders, and global economic uncertainty could reduce investor appetite in the sector, he cautioned.

But an impact the company's results was unlikely before 2017, he said.

Shares in Vestas were up 6.5 percent in late morning trading on the Copenhagen bourse, where the main index was 1.03 percent lower.


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