Vestas, Siemens Gamesa, Drop With Slump at GE Wind Unit
Vestas, Siemens Gamesa, Nordex Drop With Slump at GE Wind Unit
(Bloomberg) -- Shares of Europe’s major wind turbine makers fell after General Electric Co. in the U.S. said orders and profitability slumped at its unit in that business.
Vestas Wind Systems A/S slid as much as 6.5 percent in Copenhagen, the biggest move in almost a year. Siemens Gamesa Renewable Energy SA lost 4.6 percent in Madrid, and Nordex SE declined 2.1 percent in Frankfurt.
“If you look at the timing, they were all hit right after GE’s results,” said James Evans, a clean energy analyst at Bloomberg Intelligence. “This is rising evidence of declining profitability in their sector.”
The U.S. company slashed its dividend to just a penny a share and reported a $22.8 billion loss caused by a writedown in the value of its power business. Orders from its renewables division fell 3 percent, and profit from the unit was down 72 percent. GE blamed “continued pricing challenges in the market and lower repower volume,” according to a press release.
The wind industry is becoming increasingly competitive, as more countries switch to auctions from feed-in tariffs. Now that developers must compete for projects on price, their supply chains are also getting squeezed, including the wind turbine makers.
To contact the reporter on this story: Anna Hirtenstein in London at ahirtenstein@bloomberg.net
To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Rob Verdonck
©2018 Bloomberg L.P.