Vestas Wind Systems A/S has released its Interim Financial Report for the second quarter of 2023, demonstrating a steadfast performance in a challenging industry landscape. The report showcases encouraging figures, reflecting the company’s determination to navigate difficulties and maintain its growth trajectory.
In the second quarter of 2023, Vestas reported a quarterly revenue of EUR 3.4 billion, marking a 3.8 percent increase compared to the same period in the previous year. Despite industry headwinds, Vestas managed to improve its revenue through higher turbine deliveries and robust growth in its Service business segment.
The company’s Earnings Before Interest and Taxes (EBIT) before special items stood at EUR (70) million, translating to an EBIT margin before special items of (2.0) percent. Although this margin indicates challenges, it’s worth noting that it reflects the continued execution of older projects with lower margins from the company’s backlog. This demonstrates Vestas’ commitment to operational efficiency and industry discipline.
Vestas’ wind turbine orders showed resilience in the face of industry uncertainties. The intake of firm and unconditional wind turbine orders increased by 8 percent, totaling 2,333 MW during the second quarter of 2023. Additionally, the Onshore average price per MW (ASP) stood at EUR 0.97 million. The wind turbine order backlog remained robust at EUR 20.0 billion as of June 30, 2023.
Notably, Vestas’ combined backlog of wind turbine orders and service agreements saw a remarkable increase of EUR 3.7 billion compared to the previous year. This solidifies the company’s position for future growth and underscores its ability to navigate industry challenges effectively.
Looking ahead, Vestas is maintaining its full-year guidance. The company expects revenue between EUR 14.0 billion to EUR 15.5 billion. While the company anticipates an EBIT margin before special items of (2)-3 percent, the Service EBIT margin is projected to be approximately 22 percent. Vestas aims to continue its investments, with total investments expected to reach approximately EUR 1 billion in 2023.
Group President & CEO Henrik Andersen said: “Vestas continued to improve underlying performance in the second quarter of 2023, and based on the first half of the year, we remain on track to achieve our financial outlook for 2023. In the second quarter, our revenue was EUR 3.4bn, a 4 percent increase year-on-year, which was secured by higher value of turbine deliveries and strong growth in our Service business. In line with expectations and the continued execution of older projects with lower margins in our backlog, we achieved an EBIT margin of minus 2 percent. We received 2.3 GW of orders with an average selling price on our onshore solutions that returned to EUR 0.97m/MW. The first half of the year unfortunately also highlighted that permitting and regulatory uncertainty remain a key challenge to speed up the energy transition, and although supply chain disruptions are easing off, we expect disruptions to continue throughout the second half of the year. Vestas remains fully focused on becoming profitable and improve industry maturity and discipline to ensure the operational efficiency, quality, and scalability the energy transition requires. The global business environment is expected to remain challenging for the rest of 2023, and we want to thank our customers, partners and 29,000 colleagues for their continued support and engagement in making Vestas and the industry profitable.”
Vestas’ resilience in the second quarter reinforces its dedication to advancing the wind energy sector and its contribution to the ongoing energy transition.