Nordex Profit Falls 23% as Wind-Turbine Orders Slow; Shares DropStefan Nicola
Nordex SE, a German wind-turbine maker, said second-quarter profit declined 23 percent from a year earlier as orders for its equipment slowed.
Consolidated net income was 7.4 million euros ($10 million) in the second quarter, the Hamburg-based company said in a statement today. Sales fell 2.7 percent to 391 million euros while the order intake dropped 32 percent. The shares retreated the most in a week.
“The second-quarter numbers came in a bit weaker than expected,” mainly on execution of lower-margin projects in China and Turkey, Christopher Rodler, an analyst at MM Warburg Investment Research who has a buy recommendation on the company, said today by phone. “While order intake fell markedly, I wouldn’t see that as negative because the past two quarters have been extraordinarily positive.”
Nordex has cut costs and is streamlining production as it seeks an earnings before interest and taxes margin of as much as 5 percent this year.
The shares fell as much as 2.8 percent in Frankfurt, the steepest intraday loss since Aug. 8. Nordex was down 1.8 percent to 14.55 euros at 11:05 a.m.
Nordex increased renewals of its turbine service contracts to 97 percent in the 12 months ended June, from 59 percent a year earlier, it said. Turbine makers including Nordex are keen on generating higher-margin revenue from service contracts that reinforce company-customer ties.
Nordex “grew at clear double-digit rates in the established and stable European markets,” and in Latin America in the first half compared to the same period last year, Chief Executive Officer Jurgen Zeschky said in a letter to shareholders.