Vestas Lowers Full-Year Guidance, Cites Project Delays

Wind turbine manufacturer Vestas expects the company’s full-year revenue for 2022 to range between EUR 14.5 billion and EUR 15.5 billion, as compared to the previously expected EUR 14.5 billion to EUR 16 billion.

The adjustment of the full-year guidance follows the release of the company’s results for the third quarter of 2022 with revenue reaching EUR 3.9 billion, a 29 per cent decrease compared to the same period the year before.

EBIT before special items amounted to minus EUR 127 million, resulting in an EBIT margin before special items of minus 3.2 percent, compared to 5.7 per cent in the third quarter of 2021.

Vestas said that the third quarter of 2022 saw the continuation of ”supply chain instability and cost inflation,”.

In addition to that, ”delays on project deliveries lead to higher costs related to executing on customer commitments,” Vestas said.

The company’s EBIT margin before special items has now been adjusted to approximately 5 per cent.

Total investments, excluding acquisitions of subsidiaries, joint ventures, associates, and financial investments, are now expected to amount to approximately EUR 850 million, as compared to a previously expected EUR 1 billion.

Service revenue is now expected to grow by at least 20 per cent, as compared to the previously expected growth of a minimum 10 per cent. This is due to strong performance and additional repowering activities, Vestas said. The Service EBIT margin before special items is now expected to be around 22 per cent, compared to around 23 per cent expected before.

”In the third quarter of 2022, Vestas continued to increase the average selling price of our wind energy solutions and build further momentum within offshore wind, although geo-political uncertainty and high inflation impacted execution cost and activity levels in the wind industry,” Vestas Group President & CEO Henrik Andersen said.

”In the third quarter, our profitability improved along the lines of our expectations but remained heavily impacted by cost inflation and supply chain disruption, which resulted in an EBIT margin of minus 3.2 percent and an adjustment of our guidance.”

The quarterly intake of firm and unconditional wind turbine orders amounted to 1,895 MW, and the value of the wind turbine order backlog was EUR 18.1 billion as at 30 September 2022.

In addition to the wind turbine order backlog, at the end of the quarter, Vestas had service agreements with expected contractual future revenue of EUR 32.8 billion. The value of the combined backlog of wind turbine orders and service agreements stood at EUR 50.9 billion, an increase of EUR 3.6 billion compared to the year-earlier period.

”Our growing offshore momentum was highlighted through preferred supplier agreements totaling 3.8 GW across USA, United Kingdom, and Poland, while onshore order intake landed at 1.9 GW and an average selling price of EUR 1.06m/MW, ensuring a high order backlog of EUR 18.1bn,” Andersen said.

”The energy crisis incentivises a faster transition to an energy system built on renewables and ambitious political agreements such as the Inflation Reduction Act in USA strengthen the underlying demand for wind energy solutions, but project development and order intake remain impeded by energy market uncertainties and red tape. Everyone at Vestas remains focused on executing on our strategy and safely delivering on our customer commitments in a very busy fourth quarter, and Executive Management thanks our 28,000 colleagues for their great contribution in a highly uncertain environment.”

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