Introduction
Vestas Wind Systems, the Danish wind-turbine maker, has surpassed market expectations by reporting a full-year pretax profit. The company experienced its highest-ever quarterly order intake and foresees a rise in revenue in 2024.
Fourth-Quarter Performance
In the fourth quarter, Vestas achieved a pretax profit of EUR 173 million ($186.1 million), compared to a loss of EUR 480 million during the same period last year. This impressive turnaround surpassed the consensus of EUR 138 million derived from company data. Although revenue remained relatively unchanged at EUR 4.77 billion, it exceeded the consensus of EUR 4.58 billion. Vestas attributed the slight YoY dip in revenue to lower delivery volumes, countered by higher turbine prices. The decline in service revenue also contributed to this decrease.
Strong Performance Throughout the Year
Vestas successfully met its revenue target for the full year, generating EUR 15.38 billion. This figure comfortably falls within the expected range of EUR 14.5 billion to EUR 15.5 billion. The company accomplished this by leveraging growth in its service business, maintaining stable volumes, and implementing price increases for its turbines.
Record Quarterly Order Intake for Vestas
Vestas, a leading wind turbine manufacturer, accomplished a remarkable achievement with a quarterly order intake of 8.2 gigawatts. This represents a new record for the company and is driven by strong onshore activity in the U.S. and positive momentum in the Europe, Middle East, and Africa region. Overall, Vestas secured a total intake of 18.4 gigawatts for the full year.
The fourth-quarter intake alone amounted to EUR8.2 billion, showcasing a significant increase compared to EUR4.8 billion in the same period the previous year. Onshore wind projects played a major role in these orders, contributing 7.47 gigawatts, which is an impressive 78% rise from the previous year. Additionally, offshore orders accounted for 780 megawatts.
While Vestas benefited from an improved business environment, there are still challenges ahead due to geopolitical volatility, slow permitting processes, and insufficient grid build-out across various markets. These factors are expected to create uncertainty in 2024 according to Chief Executive Officer Henrik Andersen.
Although permitting conditions have improved in certain markets like Germany and the U.K., the overall landscape remains challenging. Andersen highlighted the need for progress in permitting, auctions, and grid infrastructure during a call with analysts.
Looking forward, Vestas has optimistic revenue projections for 2024, targeting a range of EUR16 billion to EUR18 billion. The company also aims for an adjusted EBIT margin between 4% and 6%, with total investments around EUR1.2 billion. Vestas is poised to continue its growth trajectory and further establish itself as a key player in the wind energy sector.
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