Vestas has recorded a €94m fall in earnings before interest and tax (EBIT) in the second quarter of 2020, due mainly to a large number of blade repairs.
The company reported €34m in EBIT for the second quarter of this year compared with €128m in the same quarter of last year.
EBIT margin before special items was 1%, compared to 6% in the second quarter of 2019.
Vestas said the decrease was primarily a result of “extraordinary warranty provisions made in the quarter of €175m, covering a specific repair and upgrade of a confined number of blades already installed.”
Excluding these provisions, the underlying margin was 5.9%, Vestas said.
Gross profit for the second quarter of 2020 was €228 compared with €301m in the same quarter in 2019.
Vestas booked a quarterly intake of firm and unconditional wind turbine orders amounting to 4148MW.
The value of the wind turbine order backlog was €16.2bn as of 30 June 2020.
At the end of June Vestas had service agreements with expected contractual future revenue of €18.9bn.
The value of the combined backlog of wind turbine orders and service agreements stood at €35.1bn, an increase of €3.6bn compared to the year-earlier period.
Based on the results for first half of 2020, Vestas has provided the market with new guidance.
The outlook for full-year revenue is unchanged at €14-15bn.
The EBIT margin before special items is updated to range between 5-7% (initially 7-9%), including “extraordinary warranty provisions” of €175m.
Vestas president and CEO Henrik Andersen (pictured) said: “The Covid-19 pandemic continued to impact the renewable energy industry and the global economy in the second quarter of 2020.
“In these challenging circumstances and without state aid, Vestas’ almost 26,000 employees have performed strongly, growing our revenue by 67% compared to the same quarter last year and achieving an order intake of 4.1GW as well as a record high total order backlog of more than €35bn.
“Service continued to grow with high margins in the quarter and played a key role in ensuring stable and renewable energy supply during lockdowns across the globe.
“Extraordinary warranty provisions impacted our EBIT margin negatively in the quarter, but our underlying EBIT margin of 5.9% showcases good execution that gives us confidence to deliver improving results throughout the remainder of the year.”