VWDRY Vestas Wind Systems AS (PK)

By Dominic Chopping

Vestas Wind Systems AS swung to a first-quarter net loss amid lower margin projects and higher costs, but said it might still be able to hit the full-year guidance that it provided before the coronavirus hit.

The Danish wind-turbine maker reported a net loss attributable to shareholders of 75 million euros ($81.9 million), from a profit of EUR25 million a year earlier, missing an analyst's consensus of a EUR64 million profit according to a FactSet poll.

Revenue fell 29% to EUR2.24 billion compared with the consensus view of EUR2.33 billion, as order intake was steady at EUR2.4 billion. The total turbine and service order backlog stood at EUR34.1 billion from EUR28.3 billion.

The earnings before interest and tax margin before special items fell to minus 2.4% from 2.5%.

Vestas maintained the suspension of its 2020 guidance amid the continuing uncertainty surrounding covid-19. However, it said that meeting the initial guidance on revenue and Ebit margin before special items is still possible.

Vestas had seen full-year revenue at EUR14 billion-EUR15 billion, Ebit margin before special items of 7%-9%.

In addition, Vestas expects full-year revenue growth and Ebit margin before special items in its service business to meet initial expectations of 7% and 25%, respectively.

Focus on cost savings continues and total investments this year are seen below EUR700 million, it added.

"In line with our expectations, our Ebit margin in the first quarter was negatively impacted by the delivery of low margin projects, while we also incurred increased execution costs from logistical challenges and supply chain bottlenecks, which were further amplified by the pandemic," Chief Executive Henrik Andersen said.

Vestas recently announced it will cut around 400 jobs and stop some projects as it adjusts its product portfolio amid shifting market demand.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

May 05, 2020 03:06 ET (07:06 GMT)

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