Danish wind power group Vestas reported a big third quarter profit gain on Oct. 27, easily eclipsing market forecasts, and said it was sticking to its earnings targets this year despite the global finance crisis.
But the company, the world leader in wind turbines, said its performance next year would likely be affected by a credit squeeze and excess capacity in the United States.
Vestas Wind Systems said net earnings jumped 70% in the third quarter to 165 million euros (US$246 million) compared with the same period last year. At the operating level, earnings rose 53% to 244 million euros.
The company's sales gain was more modest, increasing 3% to 1.81 billion euros.
Vestas said it was maintaining its targets for this year, for an operating margin of 11%-13% and sales of 7.2 billion euros. For next year, the margin should come to 10%-12%, with sales at 7.0-8.0 billion euros. The company said its 2010 sales assessment "reflects the uncertainty caused by the credit crisis in the short term."
It noted in particular a sluggish Spanish market and a U.S. market "characterized by excess capacity, which results in non-attractive prices and conditions on certain projects."
Vestas said the overall wind power sector had suffered in the global financial downturn, which has kept orders in the last 12 months at levels well below the same period of 2007-2008. "Many customers have been unable to finance scheduled projects either due to increased funding costs or an actual lack of funding," the company said. "Some of the banks that were previously key players in the wind turbine market are no longer active," it added.
At the same time, government stimulus measures were starting to have an impact, "and the market prospects are beginning to improve," it said.
Copyright Agence France-Presse, 2009