Variable speed AC drives supplier Vacon (HEL: VAC1V) noted on Monday that it is cutting its guidance for 2011 from 10-20% revenue growth and higher operating profit margin compared to 2010 to 10-15% revenue growth and lower operating profit margin. EPS was expected to improve considerably yet it is now presumed to be lower than in 2010. The stock price is down over 10% since the stock exchange notice. Today Vacon said it is starting personnel negotiation in Finland.
The uptake from Vacon’s comments is the not so big secret that renewables are in big trouble at the moment. Vacon says one of its solar energy clients is still arranging financing to pay off a major debt to Vacon and Vacon is preparing for credit losses. Demand for wind power products in China has been down since July and isn’t showing any signs of recovery. Vacon is also taking a charge for legal proceedings in China regarding to Vacon’s subsidiary’s custom clearance procedures.
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