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Wind turbine maker Senvion open to consolidation -CFO
November 10, 2017 / 11:38 AM / 9 days ago

Wind turbine maker Senvion open to consolidation -CFO

* Would consider consolidation - market access and technology key

* Senvion majority owned by Centerbridge, Rapid Partners

* Q3 revenues down 18 pct

* Shares down 2.7 pct at 1130 GMT

By Christoph Steitz

FRANKFURT, Nov 10 (Reuters) - Private equity owned wind turbine maker Senvion would consider taking part in ongoing industry consolidation, its chief financial officer said, as manufacturers come under increasing pressure to cut costs and prices.

Wind turbine manufacturers are having to cut costs to catch up with a rapid decline in turbine prices as the industry moves away from subsidy schemes towards auction-based systems where the lowest bidder wins.

“The wind industry is under tremendous change,” Manav Sharma told Reuters on Friday after the group reported an 18-percent decline in third-quarter sales to 480 million euros ($558 million).

He said Senvion was closing plants and cutting costs to ease the pressure on profit margins and make its supply chain more efficient.

Wind turbine makers have started to merge up to build scale, and Sharma said that Senvion, which was listed last year, would not be opposed to consolidation.

“We are happy to look at consolidation opportunities if they make sense,” Sharma said.

“We are owned by a financial investor, whose fundamental business it is to buy companies and sell them at a profit later,” he added. “Some day they have to sell.”

Private-equity firms Centerbridge and Rapid Partners together still hold 73.6 percent of Senvion.

Sharma cautioned that any consolidation should not solely be driven by synergies but also market access and technology.

Analysts at Macquarie said last week that Senvion is “well positioned if a large Asian turbine (maker) is interested in diversifying outside of their domestic markets”.

Half of the world’s top ten turbine makers are Chinese, including Xinjiang Goldwind Science & Technology, Guodian United Power Technology, Mingyang, Envision and CSIC Chongqing Haizhuang Windpower Equipment, data from consultancy MAKE shows.

Senvion’s third-quarter adjusted core earnings (EBITDA) fell by 31 percent to 41.4 million euros, giving it a margin of 8.6 percent, compared with its target of 8.0 to 8.5 percent for the full year. It stood at 7.9 percent after nine months.

The shares were down 2.7 percent by 1130 GMT.

Denmark’s Vestas, the world’s largest maker of wind turbines, saw its shares plunge on Thursday when it trimmed its profit outlook after warning that subsidy cuts in the U.S. market could hit profitability in the future.

$1 = 0.8599 euros Editing by Elaine Hardcastle

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