Vestas' bumper results defy expectations

It seems that the reported demise of the wind energy industry has been greatly exaggerated.

Despite ongoing concerns over tightening credit conditions and project cancellations, Vestas, the world's largest wind turbine manufacturer, yesterday released better than expected results for last year, reporting an increase in operating profits of 51 per cent to €668m (£604m). Sales for the year also soared from €4.86bn in 2007 to €6.03bn last year.

Significantly, the company also maintained its sales and profit forecasts for this year, predicting sales would rise about 20 per cent to €7.2bn, resulting in a profit margin of between 11 and 13 per cent.

The turbine maker said that despite widespread reports of wind farm project delays and cancellations, the company was yet to have any orders cancelled, adding that the order backlog for the end of 2008 stood at more than 4,800MW.

The company said it was also pressing ahead with its strategy of expanding its production capacity in "principal markets", including plans to double capacity at its blades plant in Colorado by 2010 and open a new plant in Inner Mongolia later this year.

However, chief executive Ditlev Engel sounded a note of caution, warning that wider expansion plans – including up to €1.2bn in future investment – were at risk of being scaled back if demand did not pick up over the first half of the year.

Warning that the rapid profit growth the company had experienced in recent years would be curtailed, Engel refused to rule out redundancies at the company.

"If the world does not improve, we will have to look to cut jobs at Vestas," he told financial analysts at the company's New York results announcement.