This a Z4 Pre Quarter Quick Update
Please see our last update from February, Headwinds Shifting to Tailwinds here. While Covid-19 has altered certainty in the near term it has not impacted the long term view for the industry or Vestas.
So what's changed since our last update?
- Layoffs announced:
- Vestas announced 400 workers, largely in technology will be laid off due to Covid-19.
- These employees were not engaged in projects for delivery in 2020 and for perspective, Vesta employs more than 25,000.
- 2020 Guidance was suspended:
- This is a common theme in the renewables space ahead of 1Q20 earnings. Covid-19 is prompting several renewable segment names to suspend their annual guidance on a combination of uncertainty surrounding ability to construct and install turbines. We have not heard about many supply chain difficulties. We have seen/heard about a number of temporary plant closures (rumor of one for Vestas) among several of their peers.
- So far we have not seen any install delays for Vestas projects but the uncertainty is there and they are fairly conservative guiders.
- They did note in the same press release in which they suspended guidance that the impact on 1Q20 was limited and that original guidance was still achievable.
- Look for a lot more detail on this when they hold the 1Q20 call on May 5th.
- Order flow ... so far so good.
- 1Q20 announced orders came in at 3.3 GW vs 3.0 GW in 1Q19. First quarter orders are typically lowest of the year and although we normally expect a certain amount of unannounced orders for the quarter with the quarterly results this appears to have been included in the update that suspended guidance (since 1Q20 announced orders amounted to only 2.0 GW leaving the unannounced portion this quarter at 1.3 GW).
- We
