Gamesa Records Strong H1, Raises Outlook

Spanish wind turbine maker Gamesa on Wednesday raised its sales and earnings targets for this year, after reporting a steep rise in net profit in the first half thanks to booming business in key markets such as India and the United States.

The company, which last month agreed a merger with the wind power business of Germany's Siemens AG to become the world's largest wind farm builder said it now targeted an EBIT (earnings before interest and tax) of 430 million euros for 2016 from a previous goal of 400 million euros.

It also revised up its wind turbine sales projections for this year to 4,000 megawatts (MW) from 3,800 MW, following a strong performance in emerging markets such as India and Latin America, as well as parts of Europe and the United States.

"Growth was spread throughout almost all regions: Europe, Latin America, the United States and India," the company said in a statement.

"Asia-Pacific, including China, is the only exception ... but we expect to see a recovery in the second half, when (sales growth) will reach double digits by the end of the year."

Between January and June, the company recorded EBIT of 230 million euros, beating forecasts of 228 million euros, while margins rose to 10.5 percent, well above its target of at least 9 percent.

It also reported a 42 percent rise in net profit to 138 million euros ($151.68 million).

The new group, which will have a market capitalisation of around 10 billion euros according to analysts, would combine Siemens' strength in offshore wind power and Gamesa's position as a market leader in onshore power generation.

"Both share similar technologies, they serve the same clients, they virtually have the same suppliers ... the benefits to joining the two activities are, frankly, clear," Gamesa chief executive Ignacio Martin told analysts, following the results.

Shares in Gamesa, which reported its results after the close, closed earlier at their highest in almost eight years on Madrid's blue-chip IBEX index.


($1 = 0.9098 euros)

(By Amanda Cooper and Jose Elías Rodríguez; Editing by Julien Toyer and David Evans)