Vestas posts loss in 2011, expects better 2012

Danish wind-turbine manufacturer Vestas made a loss of 166 million euros (220 million U.S. dollars) in 2011, but expects higher revenues this year, it said here Wednesday.Vestas'operating loss for the full year 2011 stands at 60 million euros, down from 310 million euros profit in 2010, the company said in its annual financial report.Revenue was 5,836 million euros, down from 6,920 million euros the year before. Earnings before interest, tax, depreciation and amortization (EBITDA) was 305 million euros, down from 747 million euros in 2010.Vestas, the world's largest wind-turbine maker, had originally forecast full year revenues of 7 billion euros, and an EBIT margin of 7 percent, against the actual margin of negative 0.7 percent before special items.Meanwhile, fourth-quarter 2011 revenue was 2,038 million euros, down 35 percent from the same period the previous year.The net loss, the company's first since 2005, follows a year where the company faced technical problems at some production units, as well as bad weather which delayed commissioning of wind projects, it said.In general, the global wind industry has struggled with overcapacity, falling turbine prices, and reduced support from governments owing to the economic crisis. This has also made investors more wary of the industry and its prospects.However, Vestas said it achieved its stated target of 7-8000 megawatts in 2011, with a firm and unconditional order intake of around 7,400 megawatts.Yet it could only ship a total 5,054 MW in 2011, a rise on the 4,057 MW shipped the previous year, but lower than the roughly 6,000 MW shipped in 2008 and 2009.The company retains an order backlog of 9,552 MW as of end-2011, which it calls its highest-ever level.It added that postponed deliveries have not been cancelled, and expect to be delivered and recognized as income in 2012."2011 was a tough year for Vestas," the company said in the report, as it had to abandon its targets for 2015, announce the laying-off of 2,300 employees, and see its share price drop 65 percent through the year.In 2012, Vestas expects revenues of 6,500-8,000 euros, including service revenues of 850 million euros, with an EBIT margin of 0-4 percent.It warned the EBIT margin "will be adversely affected primarily by too high production costs of the V112-3.0 MW turbine and the GridSteamer technology, which will be reduced in the course of the year, and by an expected increase in depreciation and amortization charges of approximately 100 million euro."Shipments are expected to reach around 7,000 MW, with production peaking mid year, although deliveries will fluctuate over the year's four financial quarters.Free cash flow in 2012 is expected to be positive, with annual total investment forecast at 550 million euros, and research and development expenditure expected to be 450 million euros.The full year result has sparked a number of changes in the Vestas management. Chief Financial Officer Henrik Noerremark resigned from his role Tuesday night, the company said.Chairman of the Board Bent Erik Carlsen, and Vice-Chairman Torsten Erik Rasmussen, both said they would not seek re-election to their posts, in a stock exchange notice Wednesday.Vestas shares fell 10 percent minutes after trading opened on the Copenhagen bourse at 0900 local time (0800 GMT), as investors reacted to the full-year result.