German wind OEM Nordex slashes 2021 profit guidance on inflation and logistics
Turbine manufacturer joins rivals in warning problems in aftermath of Covid pandemic will persist through next year
Nordex has cut its guidance for the full year of 2021 despite a slight improvement in preliminary third quarter profits, pointing to cost pressures and the current challenges in logistics in the aftermath of the Covid-19 pandemic that have also plagued other wind turbine manufacturers.
"Sales have developed better than expected and initiatives to enhance operational excellence and further expand capacity have been very successful – but this has not been enough to fully offset the increasing costs of materials and logistics, particularly the surge in shipping costs during the third quarter," chief executive José Luis Blanco said.
"These inflationary pressures are currently severe, but in the medium term we expect to benefit from the fundamentals shaping the industry and to return to a more positive business development."
Like Vestas, Nordex said it expects the adverse effects from the second half of 2021 to still be impacting results next year.
According to preliminary results, sales at Nordex rose to €4bn ($4.63bn) in the first nine months of 2021 from €3.2bn in the year-earlier period, due to a strong performance in installations and production in the projects segment.
That helped to push up earnings before interest, taxes, depreciation and amortisation (Ebitda) to €100.7m, from €70.8m during the first nine month of last year, corresponding to an Ebitda margin of 2.5% after an Ebitda margin of 2.2% a year earlier.
But adverse effects such as the prices of raw materials and shipping costs have continued to increase to unprecedented levels, the OEM said, and will impact results in the current fourth quarter of 2021.
Nordex still expects sales of €5.0-5.2bn this year, slightly better than the €4.7-5.2bn range given in its previous guidance.
But cost increases and the volatility in commodity and logistics markets prompted the company to revise its Ebitda margin – which shows operating profitability – to 1.0% from a range of 4.0-5.5% expected previously.
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