High costs and new products: Nordex slips into deep red

High costs and new products
Nordex slips into intense red

Nordex lacked momentum at the start of the year. However, analysts expect the company to have left the weaker quarter of the year behind. And the wind turbine manufacturer is also confident and does not shake the forecasts.

Rising costs for raw materials and logistics, as well as a change in manufacturing and lower installation production caused major losses in the first quarter of wind turbine manufacturer Nordex. “The start of 2022 was difficult and it definitely turned out differently than everyone expected,” said CEO Jose Luis Blanco. “The cost situation remains volatile and there are significant disruptions in supply chains.” Nordex SE confirmed the bearish forecast in May. The share price plummeted early in trading, but has since reduced the negative sign.

Nordex 8.80

Metzler analysts believe Nordex has left the weakest quarter of the year behind. With the objectives confirmed, the company expects nearly a doubling of sales in the coming quarters and a significant reduction in losses. With electricity prices significantly increased, higher prices should also be charged for plant manufacturers and therefore earnings prospects increase. Citigroup analysts wrote that a credible budget roadmap is now important. A capital increase is generally envisaged.

In the first three months of the year, the annual turnover fell by a good quarter to 933 million euros. Adjusted operating profit before interest, taxes, depreciation (EBITDA) and before production realignment costs was minus 52 million euros after plus 10.4 million euros in the same period of the previous year. The adjusted EBITDA margin was therefore less than 5.6%. Including realignment costs, it was minus 13.9 percent. Nordex increased its consolidated loss from EUR 54.7 million to EUR 150.5 million.

In the first quarter, Nordex installed turbines with a total power of 867 megawatts (MW) after 1453 megawatts in the same period of the previous year. Incoming orders without the services business amounted to 903 million euros with a nominal capacity of 1165 MW after 911 million euros and 1247 MW in the comparative period.

In the current year, the company continues to expect sales of between € 5.2 billion and € 5.7 billion and an EBITDA margin of between minus 4% and 0. This includes all one-off and non-operating costs. Nordex also confirmed the medium-term objective of an EBITDA margin of 8%.

Nordex initially wanted to present its data for the first quarter in early May. The publication was postponed due to a cyber attack. Due to this delay, the share has also been removed from the SDAX and TecDAX indices. Data must be submitted within 75 days of the end of the reporting period.

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