Salem Radio Network News Monday, September 26, 2022

Business

Wind turbine maker Vestas Q2 hit by higher costs

COPENHAGEN (Reuters) -Wind turbine maker Vestas on Wednesday reported a bigger-than-expected second-quarter operating loss hit by higher costs.

Heightened competition, supply disruptions due to the pandemic and soaring metals prices exacerbated by the war in Ukraine have made it difficult for wind turbine makers to churn out positive margins, despite being more in demand than ever.

The Danish firm reported a loss of 182 million euros in earnings before interest and tax (EBIT) before special items, wider than the loss of 143 million forecast by analysts in a Refinitiv poll.

That resulted in an EBIT margin of minus 5.5%.

“The first half of 2022 was characterised by geo-political uncertainty and supply chain disruptions that have caused costs to increase and an energy crisis to unfold,” CEO Henrik Andersen said in a statement.

Vestas has tried to pass on some of its higher costs to customers and said the average cost of its onshore products in the second quarter, known as average selling price, had increased by 22% compared to the same period last year, to 960,000 euros per megawatt.

“Prices are on the rise and Vestas is leading the way as the market leader. It will be positively noted by investors, even if the numbers are generally on the weak side,” Nordnet analyst Per Hansen said.

(Reporting by Nikolaj Skydsgaard; editing by Terje Solsvik and Jason Neely)

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