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Wind Turbine Maker Vestas Says Cost Cuts Bearing Fruit

(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.

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