Vestas, one of the leading turbine manufacturers in the world, has reported a 369% drop in operating profit for 2022. The EBIT loss of almost €1.2bn is compared to their previous year’s gain of €428m – a stark contrast to where the company was headed. Despite this, Vestas achieved revenue of €14.5bn and delivered 13.3GW turbines with 11.2GW order intake during the years 2021-2022, raising average selling price by 29%. The service business grew 27%, while strategic progress was made within its offshore division and a technological milestone was reached with V236-15MW prototype producing first kWh at end December 2022. However, Vestas’ current financial position is due to external headwinds causing issues for the company throughout their supply chain.
High inflation levels have reduced profitability while wind power installations are expected to affect revenue going forwards into 2023 in a negative fashion. While increasing prices on order intake is an offsetting factor, Vestas still remains challenged on reaching profitability again in the near future. In response to this situation and in order to remain resilient against external factors beyond their control, Vestas set up a crisis management team post-earthquake near Hatay & Gaziantep regions of Turkey – joining forces with local organisations in providing essential aid and shelter support for those affected by natural disasters as well as ensuring safety for its own employees. This demonstrates not only an appreciation for ethical behaviour but also shows that Vestas does not shy away from supporting communities facing unfortunate circumstances even when their own finances are challenged by external factors such as inflation and reduced installations of wind power carrying with it reduced revenue potentials. It will be interesting to observe how Vestas continues along its path following these major developments over 2021-2022 despite external headwinds affecting operations around the globe and whether they will be able to continue playing their part within local communities bearing the brunt of natural disasters without compromising on financial goals or shareholder profits too much in 2023 and beyond..
In conclusion, Vestas has experienced a shocking decline in profitability due to external headwinds such as high inflation levels and reduced wind power installations. Despite this, Vestas have still made strategic progress in offshore division and achieved technological milestones with their V236-15MW prototype. Moreover, they have also set up crisis management teams post-earthquakes in Turkey to join forces with local organisations and provide essential aid. It remains to be seen how Vestas will continue to manage their finances in 2023, as well as its commitment towards supporting communities affected by natural disasters.
Jonas Muthoni is an entrepreneur and renewable energy expert. He is the founder of MicroGridMedia.com, a website dedicated to bringing the latest news and information about solar energy and other renewable energy sources to the public. Jonas is passionate about promoting sustainable energy solutions and educating the public about the benefits of renewable energy. He is a regular speaker at industry events and conferences and is committed to driving the transition to a cleaner and more sustainable energy future.