Vestas operating profit drops 70% – reNews
Vestas’ operating profit fell to 106 million euros in the fourth quarter of 2021, down 70% from the 358 million euros recorded in the same period of 2020.
Operating profit for the whole of 2021 is also down from 2020 at 461 million euros, from 750 million euros, the company said in its preliminary results last year.
The Danish manufacturer said the wind industry faces supply chain instability, which leads to significant cost inflation and delays in project execution.
He said the current business environment is “severely affecting both visibility and profitability and therefore Vestas is today announcing preliminary figures for 2021 and a financial outlook for 2022”.
Vestas added that the market “remains volatile in the short term” but “thriving in the long term.”
The company said it expects the near future and at least 2022 to be “heavily impacted by cost inflation, while the emergence of an energy crisis caused by geopolitics and market volatility fossil fuels has also led to dramatic increases in energy prices”.
This year will continue to see supply chain instability caused by the pandemic and driving up transportation and logistics costs, Vestas said.
The company also expects to experience increased impact from inflation in the costs of raw materials, wind turbine components and energy prices in 2022.
He added that the increase in wind turbine prices is a “necessity to address external cost inflation and ensure long-term value creation for the industry.”
Vestas expects revenue for the year to be between 15.0 billion euros and 16.5 billion euros, but said there was “greater uncertainty than usual around forecasts related to execution in 2022, and the outlook seeks to take into account the current situation and challenges.”
Revenue for the fourth quarter of 2021 was nearly €4.6 billion, compared to just under €4.3 billion in 2020.
Revenue for the whole of 2021 was slightly lower at 15.59 billion euros, compared to 14.82 billion euros the previous year.
Order intake in the fourth quarter of 2021 was €2.5 billion, compared to €4 billion in 2020, while in terms of MW it fell to 2,863 MW compared to 5,558 MW over the period.
Over the whole of 2021, order intake amounted to €11.6 billion (13,896 MW), compared to €12.7 billion (17,249 MW).
The backlog for turbines was €18.1 billion (21,984 MW) in 2021, compared to €19.0 billion (24,630) in 2020.
Vestas Chairman and CEO, Henrik Andersen, said: “Everyone at Vestas has done an outstanding job in 2021 to deliver record revenues despite a global business environment that has become more challenging as the year progressed. .
“Supply chain instability and rising energy prices as well as accelerating inflation in raw material, transportation and turbine component costs continued to amplify costs throughout the year, which seriously affected visibility and profitability.
“We remain focused on executing our strategy and continuing the energy transition with our customers, but expect the current challenging business environment to continue through 2022, which is hampering our outlook for 2022. .
“To mitigate these near-term challenges, the industry must exercise the discipline necessary to protect profitability and enhance long-term value creation, and Vestas will continue to lead the way towards greater discipline.
“Partnerships remain fundamental to Vestas, and I would like to extend a heartfelt thank you to our colleagues, customers and other partners throughout the value chain.”
The company also provided an update on the cyberattack that took place on November 19, 2021.
He said: “This did not cause a significant direct impact on Vestas’ operations or add significant additional costs as the wind turbines are unaffected, but has kept some internal IT systems down for some time and has necessitated the reallocation of significant internal resources to manage the attack and mitigate the impact.
“As a result, the attack has temporarily affected our efficiency and the organization’s ability to fully focus on year-end execution.
“While the immediate incident can be considered over and the company’s cybersecurity setup helped contain the incident, Vestas’ work to further strengthen the cybersecurity and resilience of our own energy system and our own energy system continues.”