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Green Energy Crash: Vestas Shares Dive 17% On Concerns Over US Subsidy Cuts

November 9, 2017

By Paul Homewood

 

Following news of job cuts at Siemens, problems for Vestas as well, as GWPF report:

 

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The wind industry has been unsettled by parts of the US House of Representatives’ proposal on tax reform that could make renewable energy projects significantly more expensive.

Marika Fredriksson, Vestas’ chief financial officer, told the Financial Times that uncertainty over the future of the so-called production tax credit led the Danish group to trim its guidance for the year. Its underlying operating profit margin this year should be 12-13 per cent, down from a range of 12-14 per cent.

“We don’t know what the Senate will decide. What is clear is that if it is approved in its current shape and form it will have an impact on the PTC . . . and that is reflected in the guidance,” she added.

Investors, already rattled by the outlook in the US with shares down 10 per cent this month before the guidance change, sent Vestas down 17.3 per cent to DKr436.1 on Thursday morning. It was the biggest fall in its shares since 2012, when there were fears over its financial collapse.

Vestas has recovered strongly from a previous crisis in 2010-13 that also involved worries about the continuation of US government support for the wind industry. Its share price has risen more than 20-fold since the end of 2012.

As a sign of the uncertainty, the Danish group changed its guidance for free cash flow for 2017 from at least €700m to a range of €450m-€900m due to a lack of visibility on US orders in the crucial fourth quarter for turbine manufacturers.

Ms Fredriksson argued that activity level was still high and that wind turbine makers could now compete in most of the world without subsidies.

“The wind industry is participating on its own merits . . . We are competitive in the US without the subsidies. We are on a par with oil and gas. But exactly how the US market will pan out, we can’t say at the moment,” she said.

https://www.thegwpf.com/green-energy-crash-vestas-shares-dive-17-on-concerns-over-us-subsidy-cuts/

20 Comments
  1. HotScot permalink
    November 9, 2017 2:22 pm

    I though Vesta made awful packet curries in the 1970’s.

    Those took a nose dive as well. 🙂

    [I couldn’t think of anything to do with matches]

    • Dung permalink
      November 9, 2017 2:58 pm

      You could have said that this lights up the truth about wind turbines being cheap ^.^

      • Graeme No.3 permalink
        November 9, 2017 10:50 pm

        Having forced up the cost of electricity by intermittent generation, they now proclaim that wind turbines can compete – providing the regulatory system (and better the subsidies) remain the same.

    • Dung permalink
      November 9, 2017 2:59 pm

      Should have said wind energy being cheap.

    • Malcolm Bell permalink
      November 9, 2017 4:24 pm

      It may be sad – but I liked Vesta curries. You can still get them and when I see them I grab two or three.

      It takes all sorts!

      • Roy permalink
        November 9, 2017 9:05 pm

        Have to admit I liked the Vesta curries to – but not as good as my gran’s :0)

      • Graeme No.3 permalink
        November 9, 2017 10:52 pm

        I’ve never curried a packet, only chicken and/or vegetables. Are you using free range packets?

    • Gerry, England permalink
      November 11, 2017 6:03 pm

      Ah, those were the days. We used to have a Vesta meal every Christmas Eve when I was growing up. Probably had that great British delicacy, Arctic Roll, as dessert.

  2. November 9, 2017 3:36 pm

    Any company whose business model is dependent on Governments forcing consumers to subsidise it, will eventually go bust.

    • Gerry, England permalink
      November 11, 2017 6:07 pm

      Yes, one to be wary of as the price crash can come quite quickly if there is a surprise announcement. Might be hard to shift shares and even harder to sell a green bond.

  3. AlecM permalink
    November 9, 2017 3:40 pm

    The Vestal virgins are currently sacrificing an EU Commissioner to inspect his/her entrails, to see if they are truly green, to match his/her past climate aspirations.

    • Nigel S permalink
      November 9, 2017 6:06 pm

      Gyromancy might be more useful. Gyromancy is a method of divination in which a person spins around inside or walks the circumference of a circle drawn on the ground, the perimeter of which is marked with the letters of an alphabet. The divination is inferred from the letter at the position where the person either stumbles or falls across the circle’s edge. The person would repeat the practice “…till he evolved an intelligible sentence, or till death or madness intervened.” The dizziness brought on by spinning or circling is intended to introduce randomness or to facilitate an altered state of consciousness.

      • dave permalink
        November 9, 2017 9:50 pm

        “…divination…”

        We merely used a ouija board, one late night at College. At first it was quite exciting, but when the messages became monotonously obscene we realized it was just our own subconscious, giving a nudge to our fingers.

  4. November 9, 2017 10:30 pm

    ‘Its share price has risen more than 20-fold since the end of 2012.’

    But now a 17% drop is a ‘crash’? Not quite.

    • John F. Hultquist permalink
      November 10, 2017 3:19 am

      “… a stock market crash . . . the term commonly applies to steep double-digit percentage losses in a stock market index over a period of several days. ”

      So 12 percent this month and 17 percent today. Maybe I need to look up “double-digit.”

      • November 10, 2017 11:05 am

        John – that’s about the whole stock market, not one share price.

  5. Bitter&twisted permalink
    November 10, 2017 8:20 am

    Removing the subsidies shows just how viable wind and solar are.
    They were and always will be a scam.

    • Gerry, England permalink
      November 11, 2017 6:09 pm

      The Danish dolly reckons they don’t need subsidy in the US – I assume we shall soon find out. The other question is whether oil, coal and gas have been hit with carbon taxes to make them more expensive.

  6. seekerof the truth permalink
    November 11, 2017 8:58 pm

    Ever wondered how much of your pension is “invested” in these green subsidy miners?

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