Vestas made an operating loss of €894m in the first quarter of 2022, wider than the €78m loss in the same period last year, mainly as a result of the impact of Russia’s invasion of Ukraine.
The company said the operating loss after special items reflects special items costs of €401m following Vestas’ decision to withdraw from the Russian market while stopping all service and construction activities in Ukraine under the current circumstances.
There was also a one-time write down related to legacy offshore activities, Vestas said.
Special items costs of €183m related to the manufacturing footprint in China and India.
Vestas made a net loss for the period of €765m compared with a loss of €64m in the first quarter of 2021.
Revenue in the first three months of 2022 increased over 26% to almost €2.49m from €1.96m.
The increase was particularly driven by higher turbine deliveries in the US and Northern Europe, as well as positive foreign exchange rates.
The quarterly intake of firm and unconditional turbine orders amounted to 2948MW.
The value of the turbine order backlog was €18.9bn as at 31 March.
In addition, Vestas had service agreements with expected contractual future revenue of €30.0bn.
The value of the combined backlog of turbine orders and service agreements stood at €48.9bn – an increase of €4.2bn compared with the year-earlier period.
Vestas also updated its outlook for 2022.
Revenue for full year 2022 is now expected to range between €14.5bn and €16.0bn, previously €15.0 to €16.5bn.
Vestas expects to achieve an EBIT margin before special items of -5% to zero, compared with zero to 4% previously.
Vestas group president chief executive Henrik Andersen said: “In the first quarter of 2022, Vestas achieved a strong order intake and continued to increase prices in a very challenging business environment and unfolding energy crisis.
“Under these circumstances, our underlying performance was solid with revenue of €2.5bn, a 27% increase year-over-year, as well as an average selling price of €1.01m/MW and increased service revenue and EBIT, but profitability was heavily impacted by highly disrupted supply chains and one-offs.
“In the quarter, we made one-time write-downs related to the Russian invasion of Ukraine and legacy offshore activities.
“To address the current business environment, we also made a strategic re-prioritisation of select markets and plans to adjust our manufacturing footprint, which together with the write-downs on Russia, Ukraine and Offshore impacted our results negatively.
“Based on these decisions and the uncertain business environment, we are adjusting our financial guidance for the full year.
“The growing energy crisis, however, also led to stronger political support for renewables to enhance energy independence and keep energy prices low, and we are strengthening our foundation to support governments and customers achieve these goals.
“Everyone at Vestas continues to do an outstanding job in executing on our strategic priorities in unprecedented and very unpredictable circumstances, and executive management wants to thank our customers, colleagues, and partners for their ongoing engagement and support.”