Vestas trims full-year profit margin outlook as higher costs bite

(Reuters) – Vestas, the world’s largest maker of wind turbines, warned of a second quarter loss on Monday and trimmed its full-year profit margin and revenue outlook, sending the company’s shares down 5%.

Vestas’ service business, usually a bright spot, would book a one-off 300 million euro ($327.63 million) second quarter hit, it said, affected by sustained inflation, increased repairs, upgrades and operational inefficiencies.

The company said it now expects a full-year operating profit margin of 4-5% compared to previously 4-6%, and narrowed its full-year revenue outlook to 16.5 billion-17.5 billion euros from previously 16 billion-18 billion euros.

“Vestas had set direction towards improvement and this type of setback was not what we expected so that is very negative,” Sydbank analyst Jacob Pedersen told Reuters.

Shares in the company fell 5.0% by 1311 GMT.

Vestas, which earlier this year reported a surprise loss for the first quarter, said on Monday it expected a preliminary negative operating profit margin before special items of 5.6% for the group in the second quarter.

Preliminary revenue for the quarter stood at 3.3 billion euros, below the 3.8 billion euros forecast in a poll provided by the company.

Vestas will report final second-quarter earnings on Aug 14.