FRANKFURT (Reuters) – German wind turbine maker Nordex (NDXG.DE) on Wednesday reported a 29% jump in orders in the six months of 2019, supporting expectations for a strong second half and sending its shares sharply higher.
FILE PHOTO: Power-generating windmill turbines are pictured at sunset at a wind park in Cagnicourt near Cambrai, France, May 22, 2019. REUTERS/Pascal Rossignol/File Photo
Shares in the group, in which Spain’s Acciona (ANA.MC) owns a 29.9% stake, rose as much as 14.5% to their highest level in more than two weeks. They traded 7% higher at 1105 GMT.
“After a weaker first half of the year, we expect assemblies to increase sharply, resulting in significantly higher activity levels in the third and fourth quarter,” Chief Executive Jose Luis Blanco said.
The global wind turbine industry is moving fast toward a subsidy-free environment, where the lowest production costs, not the biggest level of state support, determines who gets projects, thereby putting equipment makers under pressure.
First-half earnings before interest, tax, depreciation and amortization (EBITDA) fell 55% to 17.1 million euros ($19 million), resulting in a margin of 1.7%.
But order intake rose to 2.36 billion euros in the period, up from 1.83 billion last year, driven by Europe and the United States. Nordex’s average turbine selling prices stood at 700,000 euros per megawatt (MW), a decline of 9%.
Price pressure also hurt bigger rival Siemens Gamesa SGREN.M, whose shares fell sharply last month after the group unveiled a third-quarter margin well below its target range for the full year.
Nordex, whose shareholders also include Germany’s richest woman and BMW (BMWG.DE) investor, Susanne Klatten, kept its margin target 3% and 5% for this year, on expected sales of between 3.2 billion euros and 3.5 billion.
To reach the lower end of the range, Nordex needs to make sales of at least 2.2 billion euros and EBITDA of 79 million in the second half.
Danish rival Vestas (VWS.CO) is due to report second-quarter results on Thursday, Aug. 15.
Editing by David Holmes and Keith Weir