Mixed financial results for wind turbine manufacturers in first half of 2024
The financial performance of wind turbine manufacturers in the first half of 2024 reveals varied results across the sector. Vestas reported a mixed financial outlook for 2024. The company narrowed its revenue expectations to € 16.5–17.5 billion, with EBIT margin expectations adjusted downward to 4 to 5%. This revision is primarily due to increased costs in the service segment.
For the second quarter of 2024, Vestas recorded a negative EBIT margin of 5.6% and revenue of € 3.3 billion. Despite these setbacks, the company sees ongoing profitability in its service business, with future expectations remaining optimistic. However, the adjustment in the service segment has impacted short-term profitability, suggesting a negative result for the quarter.
Siemens Gamesa faced significant challenges in the third quarter of FY2024, with orders plunging to € 665 million from € 7.4 billion in the same period the previous year. The sharp decline in onshore orders and the absence of major offshore deals from the previous year were key factors. While revenue increased to € 2.6 billion, profitability remained negative, with a loss of € 449 million before special items. This represents an improvement compared with the prior year but still indicates ongoing financial difficulties. The company revised its full-year outlook, anticipating a negative profit of up to € 2.0 billion, confirming a challenging year.
GE Vernova experienced a mixed second quarter in 2024. Although the company raised its full-year financial guidance, wind turbine orders fell by 44% due to the cancellation of a large offshore order from the previous year. Consequently, wind turbine revenues decreased by 21%. However, overall revenue grew slightly to $ 8.2 billion, driven by strong performance in the Electrification and Power segments. The outlook for the Wind segment remains flat, with the company working towards profitability. Despite challenges, GE Vernova’s raised guidance indicates a cautious yet positive outlook.
Nordex showed strong performance in the first half of 2024. The company reported a 25% increase in sales to € 3.4 billion and an improved EBITDA margin of 3.4%. Nordex also revised its full-year EBITDA margin guidance upward to 3 to 4%. Order intake in the Projects segment increased by 27%, signalling robust demand. Overall, Nordex’s financial performance is positive, with solid growth and improved profitability.
Chinese wind turbine manufacturers making inroads into Europe
In my note in the May/June 2024 issue, I discussed the European Union’s investigation into Chinese wind turbine manufacturers. It is no secret that Chinese OEMs are eager to compete in Europe, and some are now making significant strides. Mingyang, for example, recently signed a preferred turbine supplier agreement with Luxcara for the Waterkant offshore wind farm in German waters. This reservation agreement includes the supply of 16 offshore wind turbines, each with a capacity of up to 18.5MW, scheduled for installation in 2028.
In addition to this contract, Mingyang also signed an agreement with MIMIT and Renexia. This partnership aims to establish a new company that will create an industrial site in Italy dedicated to producing most of the components for wind turbines. The initial focus will be on the 2.8GW Med Wind project, a floating offshore wind farm in the Mediterranean, off the coast of Trapani.
In light of these developments, it seems likely that more contracts will follow soon, especially for offshore projects. CEOs of Western utility companies have already confirmed that they are in discussions with Chinese OEMs in addition to talks with Western OEMs. By the time we meet at WindEnergy Hamburg, maybe we will have more information on the developments involving Chinese OEMs. I would be happy to meet in person in Hamburg to discuss this and the future of the wind energy industry.
Enjoy reading and I hope to see many of you there!
Floris Siteur
Publisher
