EnergyWatch

Nordex books big losses in 2018 – but expects strong growth in 2019

The German turbine manufacturer has had everything from sales to earnings decline in its 2018 report. However, the company expects to be able to boost sales by up to EUR 1 billion in 2019.

Photo: Nordex

The 2018 report published by Nordex is gloomy, but the company has announced significantly brighter days ahead in the form of increased sales and a significantly larger order book.

The turbine manufacturer's revenue declined in 2018 by 20 percent to EUR 2.45 billion relative to the year prior, while the company's EBITDA hit EUR 101.7 million, half as much as the year prior. This created an EBIT margin of 4.1 percent

Things look worse for EBIT; which ended with minus EUR 54.2 million against a EUR 43.4 million plus the year prior.

On the bottom line, Nordex saw its EUR 329,000 profit fall to EUR 83.8 million.

Over the year, Nordex produced 727 turbines with a total 2.278 GW capacity. In comparison, the same figures the year prior sat at 1,057 turbines and 3.152 GW. Nordex explains that this is due to a significantly lower order book at the beginning of 2018 relative to 2017.

Installed capital in 2017 declined by 6.6 percent to 2,522 GW against 2,699 GW in 2017. Nordex announces that the markets beyond Europe made up the majority of the installations for the first time. Europe thereby stood for just 43 percent, while North America made up 34 percent, Latin America 18 percent, while Australia accounted for 5 percent. Altogether, Nordex installed turbines in 17 different countries.

"Our main objective for 2018 was to make our company, the Nordex Group, fit for the future. The wind industry currently offers greater opportunities than ever before. However, only manufacturers who offer highly efficient products, focus on their customers' interests and who are globally positioned and financially solid can benefit from these opportunities. For me, the high order volume we generated in 2018 is a clear indication that the Nordex Group already meets these requirements. We are continuing to work on enhancing our profile, and thus enabling profitable growth," says Jose Luis Blanco, CEO of Nordex, in the report.

The CEO also adds that the order intake has grown significantly.

The order book for new turbines is EUR 3.9 billion at the end of 2018, where at the end of 2017 this figure was just at EUR 1.7 billion. The order intake in 2019 was at 3.637 GW against 2.216 GW the year prior – a 64.1 percent increase.

Revenue in the service division grew by 9 percent to EUR 342.6 million. The service division therefore made up 14 percent of the company's revenue in 2018. At the same time, Nordex saw the order book rise by 12 percent to EUR 2.217 billion.

Over the year, EUR 112.9 billion was invested. Nordex expects to increase slightly here over 2019, investing in approximately EUR 120 million to optimize the supply chain, expand global production and not least, develop products.

Nordex is planning to be able to secure sales of between EUR 3.2 billion to EUR 3.5 billion in 2019. In this instance, sales and installations will be significantly higher in the second half of 2019. Nordex also expects to be able to secure an EBITDA margin of between 3 and 5 percent.

"We have imposed ambitious targets for 2019 in terms of improving earnings in the short term. These are the three elements involved. The first important task is to handle the high number of installations in our projects as efficiently as possible. The second element relates to our production. Here, we will continue to expand our supply chain in the best countries cost-wise and expand our production capacity, as it is important for us to be able to react flexibly to fluctuations in demand," says Luis Blanco, elaborating on the company's new turbine:

"We have imposed ambitious targets for 2019 in terms of improving earnings in the short term. These are the three elements involved. The first important task is to handle the high number of installations in our projects as efficiently as possible. The second element relates to our production. Here, we will continue to expand our supply chain in the best countries cost-wise and expand our production capacity, as it is important for us to be able to react flexibly to fluctuations in demand."

"Thirdly, we will continue enhancing our product portfolio. We are planning to unveil the third turbine model in the Delta400 series in early April this year. The new N149 / 5.X turbine will mark out entry into the 5 MW class."

Nordex expects to send the new turbine to production in 2021.

English Edit: Lena Rutkowski

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