Half-year revenues up at wind turbine firm
The wind turbine manufacturer whose decision to cease UK production sparked an 18-day factory occupation by protesting workers today said half-year revenues were up 29 per cent
The wind turbine manufacturer whose decision to cease UK production sparked an 18-day factory occupation by protesting workers today said half-year revenues were up 29 per cent. Vestas Wind Systems reported revenues of 2.3 billion euros (£1.98 billion) for the first six months of the year, although profits were flat in the period.
The Danish firm shed 425 employees at its sites on the Isle of Wight and in Southampton earlier this month citing insufficient UK demand as planning hurdles hampered wind projects.
It said margins were squeezed in the second quarter because of severance payments relating to redundancies in Northern Europe following lower activity and an increase in staff in its growing US and China markets.
Even after its capacity reductions in the UK and Denmark - where 1,142 employees were laid off - it still has excess capacity in Northern Europe. "In spite of growing global demand for renewable energy, the lack of growth in demand in certain markets in Northern Europe made these measures an unfortunate necessity," the firm said.
While Europe still accounts for 72 per cent of the company's order backlog - with the Americas and Asia at 17 per cent and 11 per cent respectively - Vestas said it expects a more even distribution across the markets in the future.
"Vestas is making a dedicated effort to keeping wind power at the top of the global energy agenda, as modern energy is presently the best solution to the climate and energy challenges and also creates thousands of local jobs in the short term," the firm said.
"However, a key prerequisite is having long-term, stable national schemes that provide the industry with the necessary opportunities to plan and invest in employees, technology and production facilities."
Earlier this month Vestas announced the closure of the UK blade production factories after obtaining a court order to remove six workers who had barricaded themselves into its plant on the outskirts of Newport, Isle of Wight.
The firm had previously used the sites to produce turbines for the US market and had intended to switch to manufacturing for the UK as it looks to invest in more production facilities in North America. Vestas said it had increased its global workforce by 5,524 in the period as it added more staff in its China and US businesses.
The number of employees totalled 21,153 at the half-year, an increase of 22 per cent on last year. Vestas said it shipped a total of 618 turbines in the second quarter, down 12 per cent on last year. It delivered full wind power systems with a capacity of 1,172 megawatts, representing a 20 per cent slump from last year.
Pre-tax profits for the second quarter were down 34 per cent on last year, at 59 million euros (£50.6 million), but half-year profits were almost flat at 137 million euros (£117.5). Vestas said the credit crisis had hit the wind industry hard, particularly as many customers have been unable to finance their projects.
The firm said some of the banks that were previously involved in the market had now ceased to be active. However, it said the many government initiatives across the world were beginning to have an effect on demand, while several new banks were stepping up to the mark.