Vestas Wind CEO Considers Extra Dividend Payments, Buyback

  • Runevad says large-scale acquistions not in current plans
  • Danish manufacturer has cash of about 1.7 billion euros

Vestas Wind Systems A/S is considering whether to spend part of its 1.7 billion-euro ($1.9 billion) cash horde on share buybacks or on boosting dividends to shareholders, its chief executive officer said.

Anders Runevad said he’s not planning to make major acquisitions after the world’s biggest maker of wind turbines amassed a net cash position at the second quarter, an improvement from 780 million euros in net debt two years ago.

Vestas’s stronger balance sheet “eases long-term projects” and gives customers the confidence that the manufacturer will remain in the market, Runevad said Monday in an interview at a Bloomberg New Energy Finance conference in London.

“A strong balance sheet is important in our industry,” Runevad said, referring to the cash pile. “We don’t rule out either an extra dividend payment or share buyback at this point in time.”

Runevad has overseen a turnaround for Vestas since taking his post two years ago. The company ended a run of run of nine quarterly losses at the end of 2013. Earlier this year, it paid a dividend for the first time in 12 years. The company, which closed factories and shed employees to cut costs, had record orders in the first half of the year.

The shares dropped 0.9 percent to 367.5 kroner at 10:46 a.m. in Copenhagen trading. They’ve more than doubled in the past year.

Aarhus-based Vestas doesn’t plan to expand through acquisitions, preferring instead to focus on a strategy of “organic growth,” Runevad said. “If we can find things that can speed up the execution of our strategy, of course those are things that we are looking at,” he said.

The executive also said he hadn’t predicted a deal announced earlier this month that saw Nordex SE, Germany’s biggest wind turbine maker, agree to purchase the wind turbine manufacturing assets of Spanish competitor Acciona SA. That deal is due for completion early next year.

A deal like that is “not in our current plans,” Runevad said, adding that it was “natural” for companies to want to expand their global footprint and product range. He declined to be drawn into predictions for future consolidation in the industry, saying “from the outside maybe you could make the argument that there are too many players, but to find the right consolidation with a reasonable value, that’s a completely different matter.”

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