'Ukraine war and lockdowns in China' | Nordex plunges as it flags sales hit and 2022 loss

Nordex expects to lose sales of about €200m ($214m) and corresponding margins in Ukraine as a direct impact from Russia’s invasion, while ongoing supply chain and logistics disruptions also depress earnings, likely pushing the wind turbine OEM to an operating loss this year.

The company in an update to its full-year guidance said it now expects consolidated sales of €5.2-5.7bn, lower than the €5.4-6bn seen in its previous 2022 guidance published at the end of March.

The lower sales would translate in to an earnings before interest, taxes, depreciation and amortisation (Ebitda) margin of minus 4 to 0%, compared to an Ebitda margin of plus 1.0-3.5% expected before any cost related to footprint reconfiguration and geopolitical events.

Nordex shares fell almost 15% to €10.73 in early morning trading in Frankfurt following publication of the update.

“The impact of the Ukraine war and lockdowns in China on the global economy and supply chains are affecting the wind industry and also weigh on our sales and margin development,” Nordex chief executive José Luis Blanco said.

“We have to expect that some of these effects could accompany us into next year.”

Nordex had postponed the publication of its first quarter 2022 earnings report to mid-June in the wake of a cyber-attack against the company last month that is one of several to hit German wind sector players since Russia began its war.

The €200m loss in sales, and further working capital write-downs due to projects that are stopped could amount to up to one percentage point of the Ebitda margin in the full year of 2022, Nordex estimated.

A further negative impact on the Ebitda margin of 2.0-2.5 percentage points is likely to come from supply chain and logistics disruptions, “especially in sea freight bookings, as well as substantial bottlenecks in steel and other critical components are proving to weigh heavily on projects in execution, partly as indirect consequences of the military conflict.”

While Nordex is trying to cut costs through the planned closure of a Spanish nacelle and a German rotor blade factory, the lockdown in Shanghai and other Chinese cities as well as the cyber-attack represent two new headwinds, the OEM said in its guidance update.

The cyber-attack alone is likely to lower the company’s Ebitda margin by up to 1 percentage point.

The manufacturer now expects to publish first quarter results on June 20, 2022.