Net profit at Vestas fell 51% in the second quarter of 2019 to €90m, down from €184m in the same period last year.
The fall in profitability was attributed to lower average project margins in the power solutions business from orders that were secured during the “price decline” in 2017, the Danish manufacturer said.
Trade tariffs, transport and raw materials all increased costs that also eroded the company’s take-home earnings.
The quarter brought half-year net profit to €115m, less than half the €286m secured in the same period in 2018, according to the results.
The earnings before interest and taxes margin for the quarter was 6%, down from 11.5%, driven by the lower gross profit and increased SG&A (Selling, General and Administrative costs.
Revenue for the quarter was also down, this time 6% to €2.1bn, however, Vestas pointed to its service unit where revenue grew by 15% to €476m.
The manufacturer also highlighted turnover at offshore business MHI Vestas, which hit €534m, up from €412m, with net profit at €22m, more than double the €10m in the year-ago period.
Vestas banked its highest-ever quarterly intake of orders with 5.7GW of deals inked during the three months, include the debut contracts for turbines from the EnVentus platform.
Chief executive Henrik Andersen (pictured) said: “In the second quarter of 2019, continued high demand for wind energy helped Vestas achieve a record-high order intake and 15% growth in service revenue. Based on these strong sales results, our order backlog soared by EUR 8.5bn year-over-year to an all-time high of EUR 31bn, again demonstrating our global leadership in a highly competitive market.”
He added: “Prices remained stable in the quarter, but further increases in tariffs, raw material prices and transport costs, continue to increase execution costs, causing our gross margin to decline compared to the same period last year.”