By a staff reporter
Danish wind turbine manufacturer Vestas Wind Systems A/S has posted a 33 per cent decline in second quarter earnings before interest and tax (EBIT), though the decline was less steep than analysts had been expecting from the embattled firm.
Vestas' Q2 EBIT came in at €12 million, down from €18 million in the same quarter last year. Analysts had forecast earnings of €5.5 million. Earnings beat expectations despite a 26 per cent revenue decline to €1.185 billion. Overall, the company absorbed a Q2 net loss of €62 million ($A91.3 million).
The firm also raised its expectations for available cash flow for the year to about €200 million, offering a more concrete view than earlier, vague guidance of "positive" cash flow.
Vestas also maintained its forecast for an underlying EBIT margin of at least one per cent and said it had reduced its backlog of wind turbine orders and service agreements by €600 million during the quarter, to €5.9 billion.
In announcing the Q2 earnings, Vestas insisted the results showed that the embattled company's two-year turnaround is going according to plan.
Threatening to overshadow the earnings report was the company's announcement that it had appointed Anders Runevad as its new group president and chief executive, effective September 1.
Mr Runevad will replace Ditlev Engel, who will leave the company.
Mr Engel had led the Danish firm for eight years and most recently had been in charge of a drastic restructuring of the company after it came close to financial collapse in 2012. Vestas was once the world's largest wind turbine producer, but has since been overtaken by General Electric.
“Following the recent measures taken, it is now the appropriate time to make this change,” Vestas chairman Bert Nordberg said in a statement.
“The company is now entering a new phase, where we want to realise our growth potential, and I am confident that Mr Runevad has the right experience to lead the company going forward.”
Mr Engel, along with former chairman Bent Erik Carlsen and former chief financial officer Henrik Norremark, is named in an investor lawsuit filed last week on behalf of 87 Vestas investors who are seeking $US14.4 million amid claims the company should have issued profit warnings earlier.
Mr Nordberg has insisted the legal issues had nothing to do with the board's decision to replace Mr Engel.
Mr Runevad was previously at Swedish Ericsson, where he had been since 1985 and was most recently president of region west and central Europe, as well as a member of the Ericsson Global executive team.
The expansion of the wind turbine sector has seen a range of new entrants steal market share from Vestas. Vestas' market share declined from 28 per cent in 2007 to 12.5 per cent by 2009 and since then the company has struggled to regain its footing as overcapacity and falling state subsidies have weighed on the wind power industry.
Vestas has cut over 5,000 jobs since the end of 2011, with plans to cut more than 1,200 additional positions by the end of 2013.
Despite the second quarter losses, Vestas shares closed up 5.4 per cent Wednesday, following the announcement of Mr Runevad's appointment.