Vestas has entered into an agreement to sell 80 percent of its shares in the subsidiaries owning the Romanian wind power plants Pantelimon, Pegasus, and Apollo to a non-disclosed buyer for a selling price of EUR 136m.
Closing of the transaction is expected to take place within eight to ten weeks. The transaction is subject to certain closing conditions, including approval by the Romanian Competition Council.
The sale of projects is expected to be recognised as revenue and earnings within the fiscal year of 2019. Vestas maintains its guidance for 2019.
In the second quarter of 2019, Vestas generated revenue of EUR 2,121m – a decrease of 6 percent compared to the year-earlier period. EBIT before special items decreased by EUR 131m to EUR 128m. The EBIT margin was 6.0 percent compared to 11.5 percent in the second quarter of 2018 and free cash flow amounted to EUR (75)m compared to EUR (173)m in the second quarter of 2018.
The intake of firm and unconditional wind turbine orders amounted to 5,696 MW in the second quarter of 2019.
The value of the wind turbine order backlog amounted to EUR 15.9bn as at 30 June 2019. In addition to the wind turbine order backlog, Vestas had service agreements with expected contractual future revenue of EUR 15.6bn at the end of June 2019. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 31.5bn – an increase of EUR 8.5bn compared to the year-earlier period.
Vestas narrows the 2019 guidance on revenue to range between EUR 11.0bn and 12.25bn (compared to previously EUR 10.75bn-12.25bn), and on EBIT margin before special items to 8-9 percent (compared to previously 8-10 percent). Total investments are expected to amount to approx. EUR 800m (compared to previously approx. EUR 700m). The adjustments are based on performance and improved visibility for the remainder of the year.
“In the second quarter of 2019, continued high demand for wind energy helped Vestas achieve a record-high order intake of 5.7 GW and 15 percent growth in Service revenue. Based on these strong sales results, our order backlog soared by EUR 8.5bn year-over-year to an all-time high of EUR 31bn, again demonstrating our global leadership in a highly competitive market. Together with our Offshore business’ increased profits, the first half of 2019 highlights the complementarity of our business model’s three main areas, creating a great long-term outlook for Vestas. Prices remained stable in the quarter, but further increases in tariffs, raw material prices and transport costs, continue to increase execution costs, causing our gross margin to decline compared to the same period last year. To finish the year as strongly as possible and prepare for high activity levels in 2020, we remain focused on executing our strategy and delivering an extraordinarily busy second half of 2019,” Group President & CEO Henrik Andersen said.
Vestas is the energy industry’s global partner on sustainable energy solutions. The company designs, manufactures, installs, and services wind turbines across the globe, and with 105 GW of wind turbines in 80 countries, they have installed more wind power than anyone else.
Through its industry-leading smart data capabilities and unparalleled 86 GW of wind turbines under service, Vestas uses data to interpret, forecast, and exploit wind resources and deliver best-in-class wind power solutions.
Vestas has offices in 24 countries and five strong regional sales business units in Northern Central Europe, Americas, Mediterranean, and Asia Pacific, and China.
Vestas Wind Systems A/S was founded in 1945, and as of 2013, it is the largest wind turbine company in the world. The company operates manufacturing plants in Denmark, Germany, India, Italy, Romania, the United Kingdom, Spain, Sweden, Norway, Australia, China, and the United States, and employs more than 21,000 people globally.