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Vestas And Ørsted Present Figures For The First Quarter Of 2024 - Vestas Share in Reverse Gear

Münster, Germany - Two companies listed in the renewable share index RENIXX World, Vestas and Ørsted, have presented their financial figures for the first quarter of 2024. While the Vestas share is coming under pressure this morning, the Ørsted share is holding its own.

Vestas and Ørsted have published their results for the first quarter of 2024. Both companies recorded a significant decline in revenues. After a plus in the same quarter of the previous year, Vestas posted a net loss. Ørsted's net result is also down, but remains positive. Both companies believe they are well positioned for the year as a whole, and Vestas and Ørsted are both maintaining their forecast for 2024.

Vestas revenue down - order intake declines by 30 percent

Vestas generated revenue of EUR 2.681 billion in the first quarter of 2024, which corresponds to a year-on-year decline of 5.2 percent (Q1 2023: EUR 2.829 billion). Vestas also failed to meet analysts' expectations, who had forecast revenue of EUR 2.99 billion on average. EBIT before special items amounted to minus EUR 68 million, which corresponds to a negative EBIT margin before special items of minus 2.5 percent. On balance, Vestas thus recorded a net loss of minus EUR 75 million, compared to a plus of EUR 16 million in the same period of the previous year.

Vestas is struggling with the ongoing difficult market environment, which is characterized by high interest rates and increased costs. After a strong fourth quarter of 2023, order intake for fixed and unconditional orders for wind turbines fell to 2,300 MW in the first quarter of 2024, which corresponds to a decline of 30 percent compared to the same period of the previous year.

The value of the order backlog for wind turbines amounted to EUR 26.6 billion as of March 31, 2024. In addition to the order backlog for wind turbines, Vestas had service contracts with expected future contractual revenue of EUR 34.4 billion at the end of the quarter. The value of the combined order backlog for wind turbines and service contracts thus amounted to EUR 61.0 billion, an increase of EUR 10.3 billion compared to the same period of the previous year.

The forecast for the year as a whole remains unchanged. Sales revenue is expected to be between EUR 16 and 18 billion, including service revenue. Vestas expects an EBIT margin before special effects of 4 - 6 percent.

"Following a very strong finish to 2023, we secured 2.3 GW of orders, while maintaining a strong commercial discipline. As we ramp up to deliver on our growing backlog and deliver across both onshore and offshore, we continue to lead the industry and focus on achieving our financial goals. We maintain our guidance for 2024," says Vestas President and CEO Henrik Andersen.

The Vestas share was under pressure yesterday and fell by 4.3 percent to a price of EUR 24.15 (closing price, 02.05.2024, Stuttgart Stock Exchange).

Ørsted: Operating result meets expectations - earnings for offshore sites increase by 18 percent

The figures from Danish energy group Ørsted, which presented its interim report for the first quarter of 2024 today, were better received. Ørsted also reported a significant decline in revenue compared to the same quarter of the previous year, with a drop of 25 percent to DKK 19.168 billion, which is higher than at Vestas (Q1 2023: DKK 25.719 billion). At DKK 25.703 billion, analysts had also expected significantly higher revenue for Ørsted on average. The offshore wind energy specialist cites lower electricity prices in all markets as the main reason for the decline in revenue. Ørsted was able to increase its operating result (EBITDA) excluding new partnerships and cancellation fees by DKK 0.6 billion to DKK 7.5 billion compared to the same period last year. Ørsted attributes the positive development to an 18 percent increase in earnings from the offshore locations. Net profit amounted to DKK 2.609 billion, down 19 percent on the same period last year (Q1 2023: EUR 3.202 billion).

"During this quarter, we have been constructing 7.6 GW of offshore wind across our regions, and we have reached significant milestones by finalising the construction of Greater Changhua 1 and 2a in Taiwan and South Fork in the US. Both wind farms are expected to reach final commissioning during second quarter. We remain focused on project execution and on de-risking the continued supply chain challenges in the industry," says Ørsted CEO Mads Nipper.

Nipper believes that important milestones have been reached as part of the strategic focus. In the USA, for example, a stake in four onshore wind farms with a total capacity of 957 MW was sold to Stonepeak. In Europe, Ørsted has also made the decision to sell its French onshore wind and solar business to Engie. "We confirm our 2024 guidance for EBITDA excluding new partnership agreements and termination fees of DKK 23-26 billion and gross capex of DKK 48-52 billion," Nipper continues.

The Ørsted share price rose slightly yesterday by 1.2 percent to EUR 52.32 (closing price, 02.05.2024, Stuttgart Stock Exchange).

Source: IWR Online, 03 May 2024