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Wind Turbine Maker Vestas Says Cost Cuts Bearing Fruit

Feb 6, 2013
Source: 
(Reuters)

Danish wind turbine maker Vestas on Wednesday offered some hope its turnaround plan is beginning to bear fruit, after it flagged an improvement in profitability this year and reported a rise in fourth quarter profits and revenue.

The wind power sector has been hit hard by overcapacity, a faltering global economy and a cut in subsidies for renewable energy by cash-strapped governments, prompting Vestas to axe jobs, stop non-profitable projects and shut factories.

Battling to restore investor confidence after profit warnings, Vestas forecast a positive free cash flow for this year, as well as an underlying EBIT margin of at least 1 percent - putting a floor under previous guidance for a positive margin.

Vestas shares traded up 5.7 percent at 1145 GMT, against a 0.8 percent increase in the Copenhagen stock exchange's benchmark index.