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Vestas' Chief Executive Ditlev Engel said the group had to get accustomed to no longer operating in a growth industry. He is under intense pressure to deliver a promised turnaround and restore investors' confidence, which analysts say will take time.
Danish wind turbine maker Vestas Wind Systems has dropped plans to build a factory in Britain after no orders were been signed for the turbines that were to be produced there, dealing a blow to the country's wind energy sector.
Vestas depends on the US for one-fifth of its orders, making it highly sensitive to US market conditions. Decades ago, California had tax breaks which became a boon for the Danish company. When those ended Vestas barely survived. The same sort of crisis could come this December, if Congress decides not to extend a production tax credit that underpins the US wind industry.
Anders Eldrup has unexpectedly resigned as chief executive of Denmark's Dong Energy, the world's leading offshore wind developer ...Earnings before interest, tax, depreciation and amortisation (Ebitda) were DKr300m lower in 2011 at DKr13.8bn.
Only those in complete self-denial would dispute that the wind power industry suffers from overcapacity, a legacy of the pre-crisis turbine construction boom when oil and gas prices were at near-record levels and few had yet appreciated the competitive challenge of shale gas. In the fat years, wind and solar power companies were tempted into extravagant investments that exploited their soaring equity prices.
"Electric cars are basically big batteries on wheels that have the virtue of being largely paid for by consumers and managed by companies like ours," Mr. Andersen said. "That's a hugely attractive proposition for utilities in countries like Denmark that need to find outlets for their renewable energy."
On the heels of its lackluster financial forecasts and revised financial earnings, Danish wind turbine giant Vestas has announced a massive wave of layoffs and a major corporate restructuring designed to protect the company from further damage.
The announcement adds to a series of earnings misses that have depressed Vestas shares more than 90 percent from a 2008 peak. Vestas and its rival General Electric Co. are suffering from slower demand growth and narrowing margins caused by rising competition from Asian companies and subsidy cuts in Europe.
The company slipped into the red in the third quarter of 2011, posting a net loss of 60 million euros down from a profit of 187 million a year earlier. ..."Vestas has gone from being a business that earns money to suddenly posting a loss. Investors will have to address the fact that Vestas is not living up to expectations."
Vestas also said it would announce a "significant change" to its corporate structure on Jan. 12, though it ruled out tapping equity markets for cash. The shares have fallen almost 90 percent from their high in 2008 after a series of earnings misses including the latest announced on Oct. 30.
"Investors are willing to see a new management on board because the current one has no more credibility," Desmaretz said. "Vestas struggled to deliver according to its plan and that is the main problem." The stock closed down 19 percent.
The first stage of tree felling was recently completed despite local and foreign environmentalists protesting against the destruction of 1,500 hectares of forest to make way for the test centre for 187-metre tall windturbines.
E.ON AG, Germany's largest utility, said its 207-megawatt Roedsand-2 offshore wind park in Denmark was operating at 130 megawatts capacity today because of ice on the turbines. "Stopped turbines must be restarted at site which cannot be done at present weather conditions."
It is closing four plants in Denmark and one in Sweden, including one in Viborg where it has been manufacturing since 1989. The factory moves follow Vestas' decision to move production of turbines away from the UK last year, when it closed its Isle of Wight facility.
Skycon, which employs about 450 people in Denmark and the UK, today announced it has filed for suspension of payments to creditors because the economic downturn has left it "cash-strapped".
Wind turbine maker Vestas Wind Systems is more concerned with keeping customers and spreading risk than with retaining its global number-one spot ...Under pressure after a profit warning two weeks ago devastated its stock, Vestas executives sought to allay investor concerns about the competitive threats in an industry where growth has slowed.
Vestas Wind Systems A/S, the world's largest wind-turbine maker, lost more than a quarter of its value in Copenhagen trading after it reported a larger-than- expected loss and cut forecasts, blaming delayed orders. ..."Vestas has suffered a serious blow to its credibility," Teea Reijonen, a London-based analyst with Royal Bank of Scotland Group Plc.
Opponents of the parliament's decision to place 250-metre high wind turbines at the protected nature area of Østerild Plantag in northwest Jutland are now turning to the EU as their last hope to stop the project. The gigantic turbines are to be part of a new wind power test centre.
Disruption of a natural landscape's aesthetics can hardly be avoided. However, turbines need to be near local power grids as transmission distance drives up the cost of electricity. Combined with other issues, such as the noise generated by "swishing" turbine blades and grinding gearboxes, and "wind turbine syndrome", or supposed infrasound-induced health problems ranging from sleeplessness to learning disabilities, wind power is still battling inertia in many communities.
In Denmark, the home of wind power, many of the leading wind power operators are facing significant economic problems, writes VA-listing. Danish Scan Energy, one of Europe's largest independent producers of renewable energy, following a failed IPO just before Christmas, is on the verge of bankruptcy. According to Danish media Scan Energy is struggling to pay the wages of its employees. It has also lodged a bankruptcy petition against the company.