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Vestas cuts outlook as commodity prices squeeze margins

Vestas Wind Systems AS Update

Vestas has reduced its full-year profit and revenue guidance. The latest wind turbine group has downgraded its outlook as the sector suffers from rising commodity prices.

The world’s third-largest turbine maker said on Wednesday that full-year sales fell from the previous guidance of 16 billion euros to 17 billion euros, from 15.5 billion euros to 16.5 billion euros, with an underlying rate of return of 6 He said it would be 5-7% compared to ~ 8%. Previously a percentage.

Henrik Andersen, CEO of the Danish Group, said pandemic-related restrictions and supply chain restrictions were also “slower than expected” factors in the first half of this year.

Rival Siemens GAMESA downgrade last month Second profit warning of the yearCiting soaring raw material prices and rising costs associated with new products.

Vestas is already disappointed with its first quarter results Suez Canal The impact of a pandemic in March and one of its major markets, India.

Steel is one of the largest input costs for turbine manufacturers. US steel prices rose 76% this year as the global economy recovered from a pandemic downturn and steel mills struggled to increase supply.

China, which produces half of the world’s steel, has also indicated its intention to reduce steel production in the second half of this year.

However, Andersen claimed on Wednesday that demand for Vestas turbines remained strong. Unprocessed wind turbine orders and service contracts in the first half increased by € 13 billion from the same point in 2020 to € 48.1 billion. The downgrade of guidance “reflects cost inflation and global challenges,” he said. The environment in which we work. “

Some wind energy leaders warn that turbine makers may come down Price pressure After many oil majors were made this year Record bids At an auction in the United Kingdom on submarine rights to develop offshore wind projects in English and Wales waters. They said this would probably result in developers putting pressure on their suppliers to protect their margins.

Investors worried about the pace of growth in the sector, and many of the stocks of clean energy companies struggled this year after hitting record highs in January.

After the downgrade on Wednesday morning, Vestas shares fell nearly 5%, with total loss more than 20% this year. The shares of SIEMENS GAMESA have declined by more than 27% since its inception in 2021.

Vestas cuts outlook as commodity prices squeeze margins Source link Vestas cuts outlook as commodity prices squeeze margins

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