Vestas is getting wind in its sails. There were losses in 2022. There will be profits in 2023

By Marek Grzybowski

Revenues for the entire year 2023 are expected to range from EUR 14 billion to EUR 15.5 billion, including service revenues to increase by at least 5%, according to Vestas’ latest announcement. In 2022, the Danish wind turbine manufacturer Vestas recorded losses of EUR 1,572 million, while it ended 2021 with a net profit of EUR 134 million, according to the company’s annual report.

In 2023, VESTAS is rebuilding its finances and expects to achieve EBIT growth of -2% to 3% percent with a service margin of around 22%. The total value of investments is to reach approximately EUR 1 billion in 2023. It should be emphasized that, as in previous years, forecasts for implementation in 2023 are subject to greater than usual uncertainty, and the outlook tries to take into account the current situation and challenges – the management reserves Vestas.

Logistical bottlenecks

The World Health Organization announced an official end to the global Covid-19 emergency earlier this month, but the disruption to the supply chain caused by the pandemic may last a little longer, predicts Henrik Andersen, CEO of Vestas Wind Systems A/S, one of the world’s largest wind turbine manufacturers.

Costly logistical bottlenecks caused by unprecedented measures introduced to control the spread of Covid-19 are disappearing, but it will take several more months to eliminate the backlog, reports Bloomberg.

“The gaps are getting smaller and some shortages and bottlenecks are being removed,” Andersen said in an interview in May. Bloomberg’s Will Mathis quotes the CEO of Vestas Wind Systems A/S: “We’re going to be busy for most of 2023 until we’re at the other end of these bottlenecks.”

Reconstruction of logistics

Production disruptions and challenges related to the shipment of wind turbines and their installation, e.g. bad weather, lack of grid connections and the like, may therefore cause delays which may affect Vestas’ financial results for 2023. In addition, exchange rate changes from current levels may also affect economic results, the company warns investors.

Getting back on track will require further improvements to global supply chains, especially in China, which only eased its Covid Zero policy in December. Normalization takes time, Vestas CEO reserves.

Supply chain important

“When someone declares that [the supply chain – MG] is open, the world doesn’t open up next Monday,” Andersen told Bloomberg, stating: “You’re going to fall behind until the supply system improves. It becomes more efficient, but it doesn’t go away.”

Referring to the Wood Mackenzie report from November 2021, the Danish turbine manufacturer emphasizes that wind energy has become an alternative to fossil fuels in most parts of the world.

The prospects for the coming years are considered promising, with wind energy playing an increasingly important role as critical infrastructure supporting energy security. Forecasts indicate an average annual increase in total wind power by 9% by 2030.