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Renewable energy is in high demand amid the race to combat climate change and the West’s drive to wean itself of Russian fossil fuels, but soaring raw material and freight costs meant wind turbine makers were already struggling before the war broke out, which is now adding to the pressure.
“The business environment worsened significantly during the first quarter of 2022 due to Russia’s invasion of Ukraine, and the associated ripple effects on global trade and cost inflation,” Vestas said in its earnings report late Sunday.
The world’s largest maker of wind turbines now expects a margin on earnings before interest and tax (EBIT) before special items of between minus 5% and 0%, down from a previously guided range of 0-4%. Sales are now seen at 14.5-16 billion euros, compared to 15-16.5 billion euros previously.
Vestas, which last month said it would dispose of its Russian assets after what Russia describes as a “special operation” to disarm Ukraine, said costs related to the war amounted to 401 million euros in the first quarter.
It also took writedowns related to its offshore wind business worth 176 million euros.
While first-quarter sales were slightly higher than expected, the company made a loss before interest, tax and special items of 329 million euros, below the 91 million euros loss expected by analysts in a poll compiled by the company.
Vestas’ EBIT margin before special items decreased by 9.3 percentage points compared to the same period last year to a negative 13.2%.
