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Vestas Quarterly Figures Q2/22: Sales Down - EBIT Negative - Share Still Ignites Turbo

Aarhus, Denmark - Vestas has presented its figures for the second quarter of 2022 (Q2 2022). In the market environment characterized by geopolitical turmoil, sales declined and EBIT slipped into negative territory. The stock is climbing.

Wind turbine manufacturer Vestas reported second-quarter 2022 sales of €3.3 billion, below the previous year's level and below analysts' estimates. After a plus of almost 100 million euros in the year-ago quarter 2021, EBIT before special items is strongly negative in Q2 2022. Vestas confirms its full-year outlook, which was adjusted in May.

Lower offshore activities, supply chain dislocations and cost inflation weigh on performance

Danish wind energy giant Vestas reported Q2 2022 revenue of 3.305 billion euros (bn euros). Compared to the same quarter last year, this is a decrease of about 7 percent (Q2 2021: 3.536 billion euros). According to Vestas, the sales development is impacted by delays in the offshore sector. EBIT before special items is negative at - 182 million euros in Q2 2022, while the wind turbine manufacturer still posted a plus of 94 million euros in Q2 2021. As a result, the EBIT margin before special items is also negative at - 5.5 percent, compared with a plus of 2.7 percent in Q2 2021.

Free cash flow before acquisitions of subsidiaries, joint ventures, associates and financial investmentss amounted to a minus of 362 million euros in Q2 2022, compared with a plus of 183 million euros for the RENIXX Group in the prior-year quarter. The bottom line for Vestas is a loss of 119 million euros, compared with a profit of 83 million euros in Q2 2021, and a loss per share of 0.8 euros, compared with a gain of 0.9 euros in Q2 2021.

"The first half of 2022 was characterised by geo-political uncertainty and supply chain disruptions that have caused costs to increase and an energy crisis to unfold. This development underlines the urgent need for a sustainable energy transition and drives stronger policy support for renewables across the globe but also creates a highly challenging business environment that negatively impacts Vestas’ financial results", Vestas President and Group CEO Henrik Andersen said of the quarterly figures.

Quarterly order intake of firm and unconditional orders for wind turbines was 2,153 MW, significantly lower than last year (Q2 2021: 5,290 MW). The order backlog for wind turbines thus reached a magnitude of EUR18.9 billion as of June 30, 2022. In addition to the wind turbine order backlog, Vestas had service agreements with expected future contractual revenues of €31.3 billion at the end of the quarter. The value of the combined wind turbine and service contract order backlog thus amounted to €50.2 billion, an increase of €2.1 billion compared with the same period last year.

Full-year forecast from May confirmed

"We reinforced our onshore leadership with an order intake of 2.2 GW and an average selling price on onshore wind turbines of EUR 0.96m/MW, a 22 percent increase year-on-year. The sustained price increases show we maintain the discipline to protect value creation and pave the way towards our profitability target", Andersen said, referring to the Group's further development.

Vestas confirms its forecast for the full fiscal year 2022, which was already adjusted in May. Accordingly, Vestas expects full-year 2022 revenue to be between €14.5 billion and €16.0 billion, with an EBIT margin before special items of -5 to 0 percent.

Vestas share price climbs 12 percent

Obviously supported by the 22 percent increase in wind turbine prices and the outlook for easing margin pressure, Vestas shares rose significantly yesterday. At the end of the day, the share of the RENIXX group leaves trading with a plus of 12 percent to a price of 26.92 euros (10.08.2022, closing price, Stuttgart Stock Exchange). This means that the Vestas share has compensated for the loss for the year to date and is up just under 2 percent.

Source: IWR Online, Aug 08 2022