Vestas Wind Systems (OMX: VWS) didn’t do any better than its competitors on Q1 2012. The company calls the performance disappointing, reflecting low level of deliveries, too high turbine costs for V112-3.0 MW and additional provisions for V90-3.0 MW.
Measured in Euro terms, first quarter revenues reached 1.1 billion. Gross profit was just positive at 12 million where as operating profit before (-204 million) and after special items (-245 million) tells a cruel story. Free cash flow was -295 million Euros, which is a bit better than last year. First quarter order intake was 1269 MW, which meant the unannounced orders were 354 MW.
According to the company, the extra warranty provision relates to 376 V90-3.0 MW gearboxes delivered by ZF Wind Power Antwerpen NV (previously Hansen Transmissions) between 2009 and 2011, which may need additional actions due to malfunctioning bearings. Vestas may be seeking for compensation from the suppliers.
Vestas said it had received inquiries from potential partners regarding the development of V164-7.0MW turbine. It is slowing the pace of development, with prototype now expected in 2014. Vestas still expects 0-4% EBIT margin, revenue of 6.5-8 billion (850 million from services and shipments of 7 GW) and a positive free cash flow. The share, which was heavily shorted going into the report, is reaching for new lows in the early going.
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