Sustainable Energy

Vestas beats forecasts, expects higher 2016 sales

Reuters with
Chinese competition is limited: Vestas CEO

Denmark's Vestas reported stronger-than-expected fourth-quarter operating profit on Tuesday and said it expected 2016 sales to rise to at least 9 billion euros ($10.07 billion) from 8.42 billion last year.

The world's largest wind turbine maker said it expected an operating profit margin before special items of at least 11 percent, up from 10.2 percent last year, and announced a dividend of 6.82 Danish crowns per share, higher than the 5.60 crowns expected by analysts polled by Reuters.

Fourth-quarter operating profit before special items rose to 404 million euros from 252 million a year earlier and well above the 374 million expected by analysts polled by Reuters.

Vestas' CEO Anders Runevad told CNBC the results were, "very, very, solid."

Runevad went on to comment on competition from China, which installed more than 23,000 megawatts of wind power capacity in 2014 according to the International Energy Agency. "We of course see Chinese competition… but I must say to (a) very limited extent," he said.

In the past year, the price of Brent crude has slumped from a high of more than $70 a barrel to around $33 today, while U.S. crude has fallen from more than $65 a barrel to just over $30, sparking concerns that low oil prices could impact the desire to push for an uptake in renewables.

Despite the slide, Runevad said that there was, "a very small correlation between oil and our business, a direct correlation, because it's only about four percent of the world's electricity that is generated with oil."

"And there are actually quite a lot of benefits also from us with the low oil price," he added.

"Of course… longer term a lower oil price (has)… an influence on the macro economy and of course longer term also, electricity and renewables is dependent on a macro economy."

Runevad added that the more pertinent link was between renewables and gas prices. "The link that exists is more around gas prices," he said.

"I will say that we have seen during last year with the fairly low gas price a very good development in wind and renewables, which is a 20-25 year investment case and not really a spot market case.

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