Vestas Says Full-Year Earnings Hit by Impairment and Provisions

By Dominic Chopping

Vestas Wind Systems AS on Friday warned that full-year 2022 results have come in below expectations after project delays, an impairment and provisions all weighed in the fourth quarter.

The Danish wind-turbine maker pre-announced 2022 results with revenue of 14.49 billion euros ($15.78 billion), versus its guided EUR14.5 billion-EUR15.5 billion, with a negative earnings before interest and tax margin before special items of 8.0% versus the guided minus 5%.

Additional warranty provisions of EUR210 million were booked in the fourth quarter related to repair and upgrade costs, and a EUR95 million impairment was booked due to challenged profitability and lower orders of its V174 turbine.

Total 2022 investments are seen at EUR758 million, after the company had guided for EUR850 million.

In 2023, Vestas expects high inflation throughout the supply chain and reduced wind power installations to hit revenue and profitability. Increasing prices will help, but still leaves Vestas challenged on profitability in 2023, it added.

The company sees full-year 2023 revenue at EUR14.0 billion-EUR15.5 billion, an EBIT margin before special items of minus 2% to 3% with total investments of around EUR1 billion.

"Activity levels in 2023 are expected to be lower than in 2022 followed by a step up in 2024," it said.

Write to Dominic Chopping at [e-mail]

(END) Dow Jones Newswires

January 27, 2023 03:54 ET (08:54 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.