In the first quarter of 2014 (Q1'14), Vestas stayed on its planned course for growth and recorded a profit following a series of losses over the past few years.
The company's operating profit before special items in Q1'14 was EUR 40 million, compared to a EUR 108 million loss in the same period last year. Vestas attributes the EUR 148 million increase to improved project margins, higher revenue, lower fixed capacity costs and lower depreciation. Net profit was EUR 2 million, compared to a EUR 151 million loss in Q1'13.
Vestas' revenue increased 17% year-over-year, coming in at EUR 1.28 billion. Firm and unconditional wind turbine orders in the quarter jumped 84% from Q1'13 to about 1.19 GW. The company delivered wind power systems with an aggregate capacity of 988 MW – a 21% year-over-year increase.
Vestas had service agreements with contractual future revenue of EUR 6.9 billion at the end of March 2014. Thus, the company says the value of the combined backlog of wind turbine orders and service agreements stood at EUR 13.8 billion – an improvement of EUR 1.4 billion compared to the year-earlier period.
"As we expected, first quarter showed improvements in all major areas," says Vestas President and CEO Anders Runevad. "This is a result of a lot of hard work from my colleagues, and we remain focused on executing on our strategy, Profitable Growth for Vestas."
Despite hailing the end of its two-year turnaround program, which included measures to lighten its assets and reduce its workforce, Vestas recently announced its new ‘Profitable Growth for Vestas’ strategy. The plan includes initiatives to ‘improve operational excellence,’ such as site consolidation and simplification of the company's geographical footprint. For example, the company announced in March plans to close a Danish office.
