Vestas reduces its full-year profit forecast as rising costs bite

Vestas is the largest wind turbine manufacturer in the world. On Monday, it warned of a loss for the second quarter and cut its revenue and profit forecasts for the year. The company's stock fell 5%.

Vestas said that its service business, which is usually a bright point, would take a hit of 300 million euros ($327.63) in the second quarter due to sustained inflation, an increase in repairs and upgrades, as well as operational inefficiencies.

The company now expects an operating profit margin for the full year of 4-5%, compared with 4-6% previously. It has also lowered its revenue forecast to 16.5 billion-17.5billion euros from 16 billion-18billion euros previously.

Jacob Pedersen, a Sydbank analyst, said: "Vestas set direction for improvement and this kind of setback is not what we anticipated so it's very negative."

By 1311 GMT, shares of the company had fallen 5.0%.

Vestas said Monday that it expects a negative operating margin of 5.6% before special items for the group's second quarter.

The preliminary revenue for the third quarter was 3.3 billion euro, which is below the 3.8 million euros predicted in the poll conducted by the company.

Vestas will announce final earnings for the second quarter on August 14. (1 dollar = 0.9157 euro) (Reporting and editing by Terje Solsvik, Stine Jacobsen)

(source: Reuters)