Vestas Wind Systems, a prominent Danish wind-turbine maker, has announced a larger-than-expected net loss for the second quarter. Despite this setback, the company remains confident in its full-year guidance due to strong growth in its service business.
Financial Results
In Q2, Vestas reported a net loss of 115 million euros ($126 million), slightly lower than the loss of 119 million euros recorded in the same period last year. However, the company experienced a revenue increase of 3.8%, reaching 3.43 billion euros. The FactSet consensus had estimated a net loss of 73 million euros on revenue of 3.42 billion euros.
Order Intake and Backlog
Vestas witnessed a significant rise in order intake, increasing from 2.1 billion euros to 2.5 billion euros. The turbine order backlog also saw a notable increase, reaching 20.0 billion euros from 18.9 billion euros. Furthermore, the service order backlog rose to 31.6 billion euros, up from an adjusted 29.0 billion euros.
CEO’s Perspective
Henrik Andersen, the Chief Executive Officer of Vestas Wind Systems, highlighted the challenges faced by the energy transition due to permitting and regulatory uncertainties. He also acknowledged ongoing disruptions in the supply chain throughout the second half of the year.
Future Outlook
Despite the current setbacks, Vestas anticipates revenue for full-year 2023 to range between 14.0 billion euros and 15.5 billion euros. Moreover, the company expects an earnings before interest and tax (EBIT) margin before special items ranging from -2% to 3%. Total investments of approximately 1 billion euros are projected.
Additionally, Vestas adjusted its service revenue growth forecast to at least 10% from the previous estimate of 5%. The company also expects a service EBIT margin of around 22%.
