Gamesa Corp. Tecnologica SA fell to the lowest price since its initial public offering in 2000 after Chinese Premier Wen Jiabao forecast the world’s No. 2 economy will grow at the slowest pace since 2008.
Gamesa dropped 6.5 percent to 2.20 euros by the close of trading in Madrid, capping a two-day decline that wiped off 10 percent of its value. The stock has fallen 65 percent in the past year as competition in developing markets squeezed its margins and developers in the U.S. and Europe struggled to finance projects.
The Zamudio, northern Spain-based wind turbine maker has focussed on boosting sales in Brazil, India and China after recession and spending cuts damped the growth prospects of the wind power industry in the U.S. and Europe. The company last month cut its sales forecast for this year to about 3,000 megawatts of turbines from about 3,250 megawatts, with Chairman Jorge Calvet citing price pressure in China.
“You cannot make the same margins in China as you can do in France or Germany,” Julien Desmaretz, a renewable energy analyst at Bryan, Garnier & Co. Ltd. in Paris, said in a telephone interview today. “That is eating Gamesa’s profit.”
Gamesa’s profit margin was 1.7 percent last year compared with 3.6 percent in 2009, according to data compiled by Bloomberg. The company saw net income increase to 51.1 million euros in 2011 from 50.2 million euros the previous year.
Wen said yesterday the Chinese economy will likely expand by 7.5 percent this year as the government seeks to rein in inflation.
The average price of wind turbines fell 4 percent in the second half of 2011 from the previous six months as Chinese manufacturers undercut European rivals like Gamesa and Copenhagen-based Vestas Wind Systems A/S, the biggest turbine maker.