Vestas Q2 loss increases, but the wind turbine unit turns a profit

Vestas, a Danish company, reported on Wednesday that its second-quarter loss had more than doubled from a year earlier. However, a focus on high-priced wind turbine projects has helped the division to return to profitability.

The world's largest wind turbine manufacturer cut its profitability forecast for the full year, citing increased costs in its services business. It also warned of a loss in the second quarter.

Vestas announced a loss for the second quarter in a row of 185 millions euros ($203.61) compared to a loss of 70millions dollars a year earlier.

Vestas surveyed analysts before releasing the preliminary figures. They had expected an average profit of 102 millions euros.

The wind turbine unit, however, exceeded expectations, delivering an adjusted profit from a loss 175 million euros, with a profit margin adjusted of 0.7%. Analysts predicted a loss in the range of 14 million euro.

At 0837 GMT, shares of the company increased by 0.1%.

Vestas' CEO stated that the company is on track to achieve a profit margin adjusted of 10% group-wide by mid-term.

Henrik Andersen, CEO of Vestas, declined to give a specific date.

He stated that the profitability and price of the projects being executed by the group are improving.

The quarter saw a 54% increase in orders, which was also in line with analyst's expectations.

Turbine manufacturers such as Vestas, Siemens Gamesa and others have raised prices and rejected projects that were low-paying. This reverses a trend where prices had been stagnant or declining.

Vestas reported that the average selling price for megawatts was 1,21 million during the third quarter, compared with 1.04 million one year earlier.

(source: Reuters)