Turbine Maker Vestas to pay Dividend

Analysts disappointed by 2015 financial targets; shares fall over 6 percent.

Danish wind turbine maker Vestas proposed its first dividend payment in 12 years after beating fourth-quarter profit forecasts, though its shares fell on what analysts described as conservative targets for 2015.

The dividend payment is a sign Vestas Wind Systems (VWS.F) has finally turned the corner after a tough few years during which it slashed jobs and costs as faltering economies and cutbacks in government subsidies hit demand for its turbines.

Vestas proposed a dividend of 3.90 Danish crowns per share, equivalent to 29.5 percent of 2014 net profits, just below the 0.52 euros or 4 crowns expected by analysts in a Reuters poll.

In its first indication of how it sees this year, Vestas said revenues should be at least 6.5 billion euros ($7.4 billion), operating margin before special items at least 7 percent and free cash flow at least 400 million euros. All these figures are below what the company achieved in 2014.

"The conservative guidance is an issue. We know that the guidance of Vestas is conservative, but it's even more conservative than I had expected," said Michael Friis Jorgensen, analyst at Alm. Brand Markets.

At 1020 GMT, Vestas shares were down 6.4 percent at 268.30 crowns.

"The target is our best estimate at this point in time so early on in the year. They are minimum guidance, so of course we can do better," Vestas CEO Anders Runevad told Reuters.

Operating profit rose to 252 million euros in the fourth quarter, above a forecast of 246 million in the Reuters poll.

Vestas's order book bulged with 6,544 megawatts (MW) worth of new turbines in 2014, the highest for at least three years.

However, Runevad said those growth rates were flattered by weak figures the year before and that would not be repeated in 2015. "This year we don't expect that kind of year-on-year growth, he said.

Vestas shares are notoriously volatile and Wednesday's drop does not bring the stock any lower than it traded last week.

"I think Vestas will do better in 2015 than they've guided. They are due to deliver around 1.000 MW of turbines more in the United States in 2015 compared to 2014, and that will raise its results," said Jacob Pedersen from Sydbank (SYDB.CO).

By Teis Jensen