Vestas blames rising costs for lowering targets

Danish wind turbine maker, Vestas, cut its guidance for 2011 earnings and revenue in a surprise trading update, saying costs had risen and some revenue had been delayed.

The world’s biggest wind turbine maker said it would defer some revenue and earnings into 2012 and book higher-than-expected costs, according to Reuters.

“As a consequence revenue for 2011 is now expected to amount to approximately six billion (euros), and the EBIT margin to approximately 0 per cent,” Vestas Wind Systems A/S said in a statement.

In October, the company lowered 2011 guidance to 6.4bn euros from 7 billion, and for the margin on earnings before interest and tax to about four per cent from seven per cent.

Official accounts for the fourth quarter and full-year 2011 are scheduled to be released on February 8.

Vestas said 2011 order intake was 7.4 gigawatts, within its guidance for 7-8 GW of firm and unconditional orders, adding it still expected a positive free cash flow for the year.

Some 400m euros in revenue and 130m of EBIT are expected to be deferred to the first quarter of 2012, the company said.

Costs are seen at some 125 million euros more than expected, due mainly to development costs for the V112-3.0 MW turbine and other technology, Vestas said.

For the fourth quarter of 2011, Vestas expects to generate revenue of about 2.2 billion euros and EBIT of about 85 million.

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Vestas blames rising costs for lowering targets