Vestas reported a setback in the first quarter of 2024, as the renewable energy giant grappled with a decline in revenue and sustained losses, echoing challenges faced by the broader wind turbine industry.
The Danish company disclosed that its earnings before interest and taxes (EBIT) before special items plummeted to a negative €68 million, equivalent to an EBIT margin of -2.5%, in the first quarter of 2024. This marked a stark contrast from the €40 million and a margin of 1.4% recorded in the corresponding period of 2023.
Operating profit, EBIT after special items, fared no better, standing at a negative €67 million (-2.5% margin) compared with €66 million (2.3% margin) in 2023.
In the face of dwindling demand, Vestas witnessed a 30% decrease in turbine order intake, with only 2300 megawatts (MW) ordered, valued at €2.2 billion, compared to 3303 MW worth €2.9 billion in 2023.
Henrik Andersen, Vestas' Group President and Chief Executive, remained cautiously optimistic amidst the challenging market conditions, stating, “Vestas' underlying performance continued to improve in the first quarter of 2024, and our financial results were in line with expectations.”
He emphasized the company's focus on maintaining commercial discipline, stating, “Following a very strong finish to 2023, we secured 2.3GW of orders, while maintaining a strong commercial discipline.”
Andersen further highlighted the company's commitment to its financial objectives and expressed gratitude to stakeholders, saying, “We maintain our guidance for 2024 and want to thank our customers, partners, and shareholders for their ongoing support, and our more than 30,000 colleagues for the dedication to both Vestas and the energy transition.”
Despite the challenges, Vestas remains optimistic about its future prospects, banking on its robust backlog and commitment to navigating the evolving landscape of renewable energy.
Turbine deliveries to customers dropped to 1720 MW in 2024 from 2317 MW in 2023, with offshore deliveries witnessing a particularly sharp decline from 214 MW to 81 MW in the same period.
Revenue from the power solutions segment also took a hit, falling to €1.8 billion in the first quarter of 2024 compared with €2 billion in 2023, primarily attributed to a lower volume of MW delivered, albeit partially offset by higher average prices.
