Vestas shares rise despite deficit

Despite record post-tax deficits of DKK 7.2 billion, investors have apparently not lost their confidence in Vestas.

On the same day as the wind turbine manufacturer published its billion kroner deficit in the 2012 financial statement, CEO Ditlev Engel confirmed that shares had ended the day at 36.7 per cent, which is 8.13 per cent higher than at the start of the day.

According to senior analyst at Alm. Brand Michael Friis Jørgensen, this was primarily due to the low position of shares prior to the release of the statement.

Loss of billions
The wind turbine shares also began to rise immediately after the publication of the 2012 result.

"Profits fared a little better, earnings fared a little better, but most importantly, orders and cash flow are doing much better than expected," said Friis Jørgensen.

The wind turbine concern was forced to post losses on the company's long-term shares of over DKK 3.7 billion. The extraordinary posts thus comprise a negative posting in the annual financial statement of EUR 701 million, or DKK 5.2 billion.

More important for investors, however, is that the losses say nothing about how earnings have fared last year for Vestas, and if there is any new money at play.

Savings
"There are expenses, we had at a time when we shouldn't have been spending, but these have been reduced, so it will not affect the cash flow," said Friis Jørgensen.

It looks as if Vestas has already got started on its planned efficiency drive and savings, which will include saying goodbye to almost 5,000 employees over the course of the year.

"This is something that really does forecast good things in the future. So all in all, there are some bright points in the 2012 statement," Friis Jørgensen concluded.