Listen to this article
Vestas Wind Systems, a wind turbine manufacturer, posted a loss of €147 million (~$146.33 million) in the third quarter (Q3) of the calendar year (CY) 2022, compared to a profit of €116 million (~$115.47 million) in Q3 2021.
In Q3 2022, the Denmark-based company generated a revenue of €3.91 billion (~$3.89 billion), a decrease of 29% year-over-year (YoY).
The drop in revenues was driven by lower deliveries in Northern Europe and the U.S. and various delays due to transportation and project execution challenges. Vestas’ decision to withdraw from the Russian market and pausing activity in Ukraine resulted in lower-than-expected deliveries in these two markets.
The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) declined by 79% YoY to €103 million (~$102.53 million).
In Q3 2022, wind turbine order intake amounted to 1,895 MW, compared to 3,727 MW in Q3 2021. This represented a decrease of 49% in order intake compared to Q3 2021, following the general market decline and its impact on the U.S. and Australian markets.
Deliveries to customers amounted to 3,569 MW in Q3 2022 compared to 6,020 MW a year ago. The decrease was mainly driven by lower onshore deliveries in the U.S. and Vietnam and lower offshore deliveries in the United Kingdom.
Vestas registered a loss of €1.03 billion (~$1.02 billion) in the first nine months (9M) of 2022, down by 864% compared to a profit of €135 million (~$134.48 million) during the corresponding period last year.
The company posted revenue of €9.7 billion (~$9.66 billion) in 9M 2022, decreasing by 12% YoY.
For 9M 2022, the EBITDA figures stood at a loss of €317 million (~$315.56 million), decreasing by 134% compared to a profit of €927 million (~$922.78 million) during the same period last year.
At the end of September, the wind turbine order backlog amounted to 19,287 MW, corresponding to a value of €18.1 billion (~$18.02 billion), of which €3 billion (~$2.98 billion) was related to offshore wind power projects.
In addition to the wind turbine order backlog, at the end of September 2022, Vestas had service contracts in the order backlog with expected contractual future revenue of €32.8 billion (~$32.65 billion), an increase of €4.8 billion (~$4.78 billion) compared to September 30, 2021, from all regions despite the negative impact from a write-down of orders in Russia and Ukraine.
Henrik Andersen, Group President and CEO of Vestas, said, “In Q3 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. In this environment, we achieved revenue of €3.9 billion (~$3.89 billion) despite project delays, while our Service business grew more than 30% with a solid EBIT margin of 24.5%, providing stability during a very challenging period.”
“The energy crisis incentivizes a faster transition to an energy system built on renewables and ambitious political agreements such as the Inflation Reduction Act in the U.S. strengthen the underlying demand for wind energy solutions, but project development and order intake remain impeded by energy market uncertainties and red tape,” Andersen added.
Recently, Vestas announced that it had dispatched one of India’s largest 3.6 MW Nacelle from its factory in Chennai for Vibrant Energy’s 54 MW wind project in Maharashtra. Vestas would move closer to completing the installation of its first 3.6 MW turbine in India by the end of this month.
Earlier, Atlantic Shores Offshore Wind, a 50:50 partnership between Shell New Energies and EDF Renewables, announced that it had selected Vestas as the preferred supplier for its 1.5 GW offshore wind project in New Jersey in the U.S. Vestas would provide its V236-15.0 MW offshore wind turbines, with installation expected in 2027.