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Abu Dhabi, UAESunday 16 December 2018

Wind speed slows for Vestas’ Q2 profit

The world’s largest wind turbine manufacturer saw profits drop 33 per cent

Saudi Arabia is expected to tender up to 800MW of wind capacity this year. Victoria Hazou / The National
Saudi Arabia is expected to tender up to 800MW of wind capacity this year. Victoria Hazou / The National

Second quarter profits dropped for Denmark’s wind turbine manufacturer, Vestas, driven by a downturn in its power solutions unit. However, the company maintains that its outlook for the year, adding more than EUR5 billion in revenues by year-end.

Profits fell 33 per cent to EUR180 million in the three months ending in June compared to EUR278m the same period last year. The company said that the power solutions segment drove the decrease, only partly offset by improved performance in the services sector.

“Our second quarter results showed improved order intake across all regions, increased order backlog, strong performance in service and half-year revenue on par with last year,” said Anders Runevad, group president and chief executive of Vestas. “Looking ahead, we need to continue to put all of our focus on effectively executing on our strategy.”

Revenue for the quarter dropped 14 per cent to EUR2.2bn.

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Though Vestas had an increase in its order backlog year-on-year, deliveries dropped 26 per cent to 1.83GW. The company said that this was driven by all regions, particularly in its largest operating zone of Europe, Middle East and Africa. The EMEA region received turbines totaling 797 megawatts, with Morocco being the only country in the Middle East North Africa area to receive a 117MW order.

The latest turbines to Morocco are for Acwa Power’s Khalladi wind park, the country’s first renewables project financed by the European Bank for Reconstruction and Development. “Being Vestas’ first order in Morocco since 2000, this project represents a big step forward for us as we continue to work hard to build a stronger presence in the country and contribute to the development of the growing Moroccan wind industry,” Marco Graziano, president of Vestas Mediterranean, said last year.

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Despite the results across all key financial markers, the world’s largest wind turbine manufacturer maintains its outlook for the rest of the year adding more than EUR5 billion in revenues. The Danish company is the world’s top wind turbine manufacturer with 85 gigawatts of turbines installed in 75 countries, including Egypt and Morocco.

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However, there is the opportunity to expand in the Mena region as Saudi Arabia gets its wind ambitions underway. The country’s Renewable Energy Project Development Office (Repdo) announced last month that it had issued a request for qualifications for the 400MW Al Jouf wind project.

Egypt is also looking to gain more wind power with 2GW expected to be tendered under its feed-in tariff programme. Lamya Hady, head of private projects at the Egyptian Electricity Transmission Company told The National that there were 36 companies qualified for wind projects ranging in size from 50MW to 100MW with the deadline to meet all financial obligations in April.