Vestas wind-turbine manufacturer to cut 1900 jobs

Vestas reported this morning the following summary.

Vestas generated first-quarter revenue of EUR 1,105m, an increase of 58 per cent, achieving an EBIT improvement of 124 per cent to EUR 76m and lifting the EBIT margin from 4.9 per cent to 6.9 per cent. Net working capital stood at 8 per cent of expected annual revenue, against 2 per cent in Q1 2008. The increase was significantly attributable to larger inventories. The order backlog of firm and unconditional orders amounted to EUR 4.9bn at 31 March 2009. Full-year expectations for 2009 are still for an EBIT margin of 11-13 per cent on revenue of EUR 7.2bn. At the end of the first quarter of 2009, Vestas’ total undrawn financial facilities amounted to EUR 850m.

Vestas continues to expand its operations in the USA and China owing to the positive market prospects. Capacity will be reduced in Northern Europe, as demand in this area at the moment does not meet expectations. Consequently, Vestas expects to lay off approx 1,900 employees in the production units in Northern Europe, primarily in Denmark and England.

As a result of these measures, expected investments in property, plant and equipment and intangible assets are reduced by EUR 200m to EUR 1.0bn. The British Government’s commitment of 21 April 2009 regarding massive investments in wind power and higher tariffs, will have a positive influence on Vestas’ possibilities of producing blades in Great Britain.

Q1 2009 at a glance (against Q1 2008)
+ 21% Vestas shipped a total of 490 turbines
– an increase of 21 per cent

+ 29% Vestas shipped wind power systems with an aggregate capacity of 885 MW
– an increase of 29 per cent

+ 58% Vestas generated revenue of EUR 1.1bn
– an increase of 58 per cent

+ 124% EBIT amounted to EUR 76m
– an increase of 124 per cent

+ 70% First-quarter profit after tax amounted to EUR 56m
– an increase of 70 per cent