In the first quarter of 2009, the Germany-based Nordex Group says it hit a 17% increase in sales to €233.3 million (previous year: €199.3 million). Growth drivers, the company says, were rising business volumes in the U.S. and Europe (excluding Germany). Turbine assembly output increased by 25% to 262 MW (versus 210 MW in 2008). The company’s new installed wind power capacity of about 180 MW is on a par with the previous year.
Nordex says project profitability remains stable, gross profit (total revenues net of the cost of materials), which reflects changes in variable costs, rose by 15% to €51.7 million (€44.9 million in 2008). Accordingly, the cost-of-materials ratio contracted by 170 basis points to 78.9%.
Until autumn 2008, the company had invested in new recruitment expecting a brisk sales growth. This is reflected in personnel expenses, which increased by 53% year-on-year to €26.0 million. However, these costs were dropping throughout the year. At the same time, depreciation expenses rose by some €1.3 million as a result of the previous year’s heavy capital spending. These structural costs exerted pressure on earnings before interest and taxes, which dropped to €0.3 million (previous year: €6.6 million), while consolidated profit came to €0.5 million (previous year: €5.7 million).
With an equity ratio of around 38%, the balance sheet structure remained stable. Cash and cash equivalents amounted to some €62.6 million as of the balance sheet date (December 31, 2008: €111.7 million). The increase in cash tied up was primarily due to the rise in inventories to €405.6 million (December 31, 2008: €372.2 million). Adjustments to inventory requirement management and shorter project turnaround times should yield destocking effects in the second half of 2009.
Nordex is confident of 90% of its sales target for 2009 thanks to firm orders and projects which have already been completed. Assuming sales volumes remain flat across the entire industry, Nordex anticipates an increase in its own sales to over €1.2 billion for the year. Following a strong order intake of €234 million in the first quarter of 2009, order books were valued at around €2.9 billion (€3.3 billion in 2008) and comprise firm contracts worth €853 million and contingent orders (master contracts including advance payments) of €2.1 billion.
“Looking ahead over the next few months, I am cautiously optimistic about the prospects for new business,” says Thomas Richterich, CEO of Nordex AG, adding that while capital markets are not yet providing the original volumes of finance for power station projects, economic stimulus programs are beginning to bear fruit. “We are preparing ourselves for the upswing which all experts are anticipating so as to start generating sales from new business without delay,” he adds. The Company expects its profitability to be down on the previous year primarily as a result of the higher structural costs.
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