Vestas reports higher Q3 earnings, lowers full-year outlook slightly

WINDSOR – Vestas Wind Systems A/S reported 19% revenue growth in its third quarter and an additional 3 percentage points in profitability compared with last year, but has slightly revised down its expected full-year revenue and profit.

The Denmark-based company has a nacelle-manufacturing facility in Brighton and a blade-manufacturing facility in Windsor, which have both been kept busy this year with multiple orders from throughout the country, as well as its first offshore order in New York.

While revenue came in at 5.17 million euros in the third quarter, that equates to a gross profit of 544 million euros, with a gross margin of 10.5%, compared with 8.1% in the third quarter of 2023, according to the company’s third-quarter report.

During the quarter, order intake amounted to 4,432 megawatts, with a value of 4.9 billion euros. The company was able to deliver 4,162 megawatts in the quarter, which was 14.3% more than the same time last year. The company reports that increase was driven by higher onshore deliveries in the Americas and Europe, the Middle East and Africa.

Vestas installed a total capacity of 185 gigawatts in 88 countries, the company reported. In the United States alone, Vestas reports that it delivered 852 megawatts-worth of projects, compared with 750 megawatts at the same time last year, and it was the largest order intake among several countries in which Vestas delivers wind. For the full year of 2023, Vestas delivered 2,079 megawatts within the United States, which was the top country, followed by Brazil at 1,635 megawatts, and Germany at 1,486 megawatts.

“When we look at the Q3 order intake of 4.4-gigawatt, that was stable compared to last year,” Henrik Anderson, Vestas’ CEO, said in an earnings call transcribed by Seeking Alpha.  “Good market activity to be driven by onshore in all regions, as well as two offshore projects, including our first offshore project in the U.S.

“On the project level side, Q3, we’ve seen some regional disruptions, [which] continues to threaten supply chain. We had a bit of a stop and go in and around the threat of a strike in part of the U.S. harbors, but then outside that, we’ve actually seen a pretty stable and a good execution in Q3,” Anderson said.

The company’s service sector generated 927 million euros in the quarter, which was only slightly lower than the same time last year. The company reports that “the lower revenue was primarily driven by adjustments to planned costs of a larger portfolio of service contracts in the second quarter of 2024, reflecting increasing cost levels. The company reports that foreign exchange rates resulted in a 25 million euro hit on revenue growth in this segment.

The company had expected revenue growth of 16.5 billion to 17.5 billion euros by the end of the year, with margins of 4% to 5%. That outlook will more than likely be “at the lower end of the range,” the company reported.

One analyst asked about how the U.S. presidential election could affect Vestas’ order intake, which Chief Financial Officer Hans Smith discounted.

“I think anything that gets permitted or also gets grid approval in the U.S. gets built very fast,” Smith said. “There is a general need and also demand higher than the supply right now for new green electric plants, among other things, to data centers and others. So in the U.S., that runs as we will see. And so far, so good this year. And as you can also see here, we’ve had a steady flow of orders in Q3 and we expect to see some of the same thing in Q4.” 

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