Vestas Shares Slump as Trump Risk Spooks Green Investors

(Bloomberg) -- Shares of Vestas Wind Systems A/S, the world’s biggest wind-turbine maker, fell the most in three years as investors weighed the impact of the U.S. election on the renewable energy sector.

• Shares fell as much as 13% before recovering some losses; down 7.7% by 10:04 a.m. in Copenhagen
• The wind turbine maker posted a stronger-than-expected profit in the third quarter on Wednesday
• Earnings before interest and tax and before significant items fell 4% from a year earlier to 412 million euros ($480 million), but came in above the consensus analyst estimate of 373.8 million euros

Key Insights

• “Vestas outperformed consensus in the third quarter and is on track toward guidance targets, but uncertainty from the U.S. election result is driving volatility within the renewables sector right now,” said James Evans, clean energy analyst at Bloomberg Intelligence
  • Read more: Renewable Energy Cos. Fall With U.S. Election Too Close to Call
• The estimate for Vestas’s dividend payments over the next year fell 1% to 7.90 kroner ($1.24), according to Bloomberg Dividend Forecasts
• Vestas had a surge of turbine orders in the third quarter, making up for a slow start to the year after the coronavirus interrupted its supply chain. The company had its highest ever amount of deliveries in a single quarter, helping grow revenue 31% from a year earlier to 4.8 billion euros. That’s without a potential future benefit from green stimulus packages, the company said
• Vestas is buying out its joint venture partner to sell turbines at sea in a move to try and dominate the growing offshore wind sector. But success might not be seen for years. Even if Vestas wins every order available in the next five years, its market share would still be smaller than that of Siemens Gamesa Renewable Energy SA, according to BloombergNEF

Executive Comment

• Marika Fredriksson, Vestas chief financial officer: “We’ve had, during Trump’s period, record years in the U.S. and U.S. politics is nothing we can influence”
• “We will continue to drive the business in the U.S. as we have done so far, whoever wins”

Market Reaction

• Shares are up 53% this year

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• Net income in the third quarter was 290 million euros, down -4.3% compared to same period last year, but beat consensus estimate of 270.9 million euros
• Company maintains view that revenue for the full year will be between 14 billion euros to 15 billion euros
• More on the numbers
• Full statement

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