Vestas reports wider Q2 loss, sees progress in Power Solutions

Danish wind turbine manufacturer Vestas Wind Systems A/S (CPH:VWS) on Wednesday reported a net loss of EUR 156 million (USD 171m) for the second quarter of 2024, compared to a deficit of EUR 115 million a year ago, as it said the turnaround in its Power Solutions business is on track, while a cost update impacted the Service segment.

Earnings before interest and tax (EBIT) before special items were negative EUR 185 million, with a negative EBIT margin of 5.6%, reflecting adjustments to planned costs in the Service segment. These adjustments led Vestas to narrow its full-year outlook earlier this week.

Second-quarter revenue declined 3.9% year-over-year to EUR 3.3 billion, impacted by the cost update in Service, which was offset by higher average prices for turbine deliveries.

Order intake grew 54% year-over-year to 3,596 MW, driven by onshore projects in both Europe and Asia Pacific.

Vestas ended the quarter with a combined backlog of wind turbine orders and service agreements worth a record EUR 63 billion, EUR 11.4 billion more than a year earlier.

Some details of the company's results:

“In the second quarter of 2024, Vestas’ underlying earnings improved according to plan, driven by significant progress within Power Solutions of 8 percentage points year-on-year,” said chief executive Henrik Andersen.

“Our order intake had an average selling price of EUR 1.21m/MW and grew more than 50 percent year-on-year, which together with an adjusted free cash flow of more than EUR 0.5bn highlight the positive trajectory in Power Solutions and our continued strong commercial discipline,” Andersen also commented.

The CEO said the company’s Service business remains a strong business area, although it delivered negative EBIT of EUR 107 million in the second quarter due to the increase in planned costs.

(EUR 1 = USD 1.093)

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