Danish wind turbine maker Vestas reported on Wednesday a wider-than-expected operating loss for the third quarter, cutting its full-year outlook due to continued cost inflation and supply chain instability.
Vestas cut its 2022 profit margin outlook to minus 5% from previously between minus 5% and 0%, and narrowed its full-year revenue forecast to between 14.5 billion and 15.5 billion euros, from a previous forecast of 14.5 billion and 16 billion euros.
Vestas continued to increase its average selling prices but "geo-political uncertainty and high inflation impacted execution cost and activity levels in the wind industry," Chief Executive Henrik Andersen said.
In the third quarter, Vestas' EBIT margin was minus 3.2%.
"The downgrades are not catastrophically large, but it is one more in a series of far too many," Nordnet analyst Per Hansen said.
The analyst anticipated improved offshore wind orders, falling steel prices and significantly lower freight rates in 2023.
Vestas reported a total onshore and offshore intake order of 1,895 megawatts in the quarter, below an average estimate of 2,482 MW seen in a company-compiled consensus.
The company's operating result before special items swung to a loss of 127 million euros ($125.5 million) from a year-ago profit of 325 million, lagging a 40 million euro loss forecast by analysts in a poll compiled by the company.
Supply chain concerns and cost issues also hit main rival Siemens Gamesa which has issued several profit warnings and plans on cutting nearly 3,000 jobs, including its head of onshore unit. General Electric Co also said it was laying off workers at its onshore wind unit.
The shares were flat at 0828 GMT after falling over 5% at the opening.
($1 = 1.0118 euros)
(Reuters - Reporting by Marie Mannes and Jagoda Darlak, editing by Terje Solsvik and Elaine Hardcastle)