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Wind mill maker Vestas reports Q2 EBIT below estimates

The rotor blade of a wind mill is displayed at the “Hannover Messe” industrial trade fair in Hanover April 19, 2010. REUTERS/Christian Charisius/File Photo

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  • Keeps guidance, but operating loss below estimates
  • Average value up by 22%
  • Shares rise 4%
  • U.S. energy bill “very positive”, will boost order intake – CEO

COPENHAGEN, Aug 10 (Reuters) – Wind mill maker Vestas (VWS.CO) expects to provide more excellent results next year, its leader said on Wednesday, as high costs from recycleables and transport, which hit second-quarter results, are offered to customers.

Shares in Vestas rose 4% following the firm said it raised its prices in the next quarter by 22% when compared to same period this past year, an indicator that the business’s hard-hit income could improve.

Heightened competition, supply disruptions because of the COVID-19 pandemic and soaring metals prices exacerbated by the war in Ukraine have managed to get difficult for wind mill makers to create positive margins, despite solid demand.

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The Danish firm reported a quarterly lack of 182 million euros ($185.73 million) before interest and tax (EBIT) before special items, wider compared to the lack of 143 million forecast by analysts in a Refinitiv poll.

That led to an EBIT margin of minus 5.5%.

However the average cost of onshore products in the next quarter, referred to as the average value, had risen to 960,000 euros per megawatt, Vestas said.

“The purchase price on the orders they get is merely significantly greater than what we expected, and that means it is less bad that the full total order intake is leaner than expected,” Sydbank analyst Jacob Pedersen told Reuters.

“We’ve used orders at the best price level in a decade,” LEADER Henrik Andersen told Reuters. “Our price development will result in a far more positive 2023,” he added.

Andersen also said a fresh energy bill passed in the U.S. Senate on Monday was “very supportive of renewable energy in the usa on the next a decade.” If passed inside your home of Representatives, it could strengthen Vestas’ order intake next year and in 2024, he added. read more

IN-MAY, Vestas slashed its 2022 margin forecast because of the war in Ukraine and writedowns in its offshore business. Rival Siemens Gamesa (SGREN.MC) the other day lowered its 2022 outlook and said earnings would remain negative through 2023. read more

“With guidance retained and onshore pricing on new onshore orders much better than expected, we see two key positives to point improving momentum on profitability into H2 and 2023,” Citi analysts said in an email.

($1 = 0.9799 euros)

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Reporting by Nikolaj Skydsgaard; editing by Terje Solsvik, Jason Neely and Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

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