Vestas is back in the black after recording delivering a modest profit in the first quarter of 2023.
EBIT before special items amounted to €40m for the first three months of the year, turning around a €329m deficit in the year-ago period.
The first quarter 2023 numbers mean an EBIT margin before special items of 1.4%, compared to negative 13.2% in the first quarter of 2022.
This was driven by the sale of its converter business, lower warranty provisions and a strong quarter for its service arm.
The quarterly intake of firm and unconditional wind turbine orders amounted to 3303MW with an average price per MW (ASP) of €0.89m.
Comparing to the fourth quarter 2022, the order ASP is negatively impacted by mix effects from project scope, different countries, as well as foreign exchange rates, while underlying pricing and project profitability are not diluted, the board said.
The value of the wind turbine order backlog was €19.7bn as at 31 March 2023, it added.
In addition to the wind turbine order backlog, at the end of the quarter, Vestas had service agreements with expected contractual future revenue of €31bn.
The value of the combined backlog of wind turbine orders and service agreements stood at €50.7bn – an increase of €1.8bn compared to the year-earlier period.
The board added that Vestas maintains the full-year guidance, expecting revenue of €14.0bn-15.5bn including service revenue, which is expected to grow by a minimum of 5%.
Group president and chief executive Henrik Andersen (pictured) said: “Vestas has had a good start to 2023 and achieved 14 percent growth year-on-year in revenue and an EBIT margin of 1.4%.
“Our growth in the first quarter was driven by higher value and increased volume of delivered projects, as well as a 29% revenue increase in service.
“Compared to 2022, our profitability in the first quarter of 2023 was positively impacted by the sale of our converter business, lower warranty provisions, and solid profitability in service.
“Order intake increased 12% year-on-year to 3.3GW with an Average Selling Price of €0.89m/MW, which was alone caused by mix effects from scope, country, and exchange rates.
“Underlying pricing and profitability are not diluted by the lower Average Selling Price in the quarter, and we continue to strengthen industry discipline and maturity to return Vestas and the industry to profitability and prepare for future growth.
“The wind industry remains challenged by political uncertainty, slow permitting processes, and high inflation, which we expect to continue throughout 2023, but we are on track for our 2023 financial outlook.
“There is still a long way to go for the full year, and we must remain focused on delivering on our promises to our customers and partners.
“We want to thank our customers and partners for their continued support, as well as our more than 28,000 colleagues for their hard work getting Vestas back to profitability and powering the energy transition.”