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Vestas Rises On Better-Than-Expected 2010, Outlook

Vestas Rises On Better-Than-Expected 2010, Outlook
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Τετ, 9 Φεβρουαρίου 2011 - 18:30
Shares in Vestas Wind Systems A/S (VWS.KO) rose more than 6% Wednesday after the company reported a 25% increase in full-year 2010 net profit on record orders and an increase in deliveries in the fourth quarter.
Shares in Vestas Wind Systems A/S (VWS.KO) rose more than 6% Wednesday after the company reported a 25% increase in full-year 2010 net profit on record orders and an increase in deliveries in the fourth quarter.

Analysts said the Danish wind turbine manufacturer's slightly better-than-expected results had prompted the rise, along with relief after the resolution of an almost 70-minute delay to the earning report's release. The company said the delay was caused by the Nasdaq distribution system, which was down this morning.

"For a company that's disappointed rather than exceeded expectations in recent quarters, I think that the numbers coming basically in line and with a slightly better-than-expected outlook was taken positively by the market," said Citi analyst Robert Clover.

Vestas Chief Executive Ditlev Engel told Dow Jones Newswires that 2010 had been a "tough year" but the company was now on track and orders were flowing in.

The company forecast 2011 revenue to be mostly unchanged on 2010 levels at around EUR7 billion, and forecast a "minor loss" for the first quarter.

Engel said in an interview that the loss was mostly due to technical issues related to when projects are delivered and when that shows up on the balance sheet. The company had also experienced a loss for the same reason in the first quarter of 2010, which is seasonally the weakest quarter, he said.

But Engel said the expected order intake for 2011 would put the company in a better position going into 2012.

"We expect the order intake in 2011 to be higher than the shipments, meaning we expect to build a backlog of orders, so 2011 will put Vestas in a better balance and give us better visibility for beyond 2011," Engel told Dow Jones Newswires in a telephone interview.

Order intake in 2010 was almost triple at 8,673 megawatts from 3,072 megawatts in 2009 and was the largest ever, the company said.

Net profit for the full year ending Dec. 31, 2010 , rose to EUR156 million compared with EUR125 million a year earlier. Full-year earnings before interest rose 23.5% to EUR310 million.

Revenue rose 36% to EUR6.92 billion for the full year, slightly above the company's forecast made in November. The increase was due to higher deliveries as well as accounting changes announced at the end of last year, Engel said.

The company's closely watched margin on EBIT was at 6.8% for 2010, up from 4.9% in 2009 and in line with their earlier forecast.

Vestas said it expects a 2011 EBIT margin of 7% after an expected increase of around EUR100 million in depreciation and amortization.

Fourth quarter 2010 revenue was more than double 2009 at EUR3.12 billion versus EUR1.47 billion driven by increased deliveries.

At 1108 GMT, Vestas shares were up 4.63%, or DKK8.20, at DKK185.30, off an earlier high of DKK188.50 and outperforming the broader Copenhagen market.

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