FRANKFURT (Reuters) - German wind turbine maker Nordex NDXG.DE has slashed its sales forecast for 2017, joining rivals in saying an industry shift towards awarding orders via auctions is hitting margins and demand in its core European market.
Policymakers governing wind power generation have moved away from a regime based on subsidies to one of tenders, favouring project developers that can make low bids, which in turn puts massive pressure on equipment makers.
Denmark's Vestas VWS.CO, the world's largest maker of wind turbines, saw its shares tumble by nearly a fifth last week when it cut its profit goal for this year, pointing to competitive auctions and possible regulatory changes in the United States.
That was only days after world No.2 Siemens Gamesa SGREN.MC announced up to 6,000 job cuts, or more than a fifth of its workforce.
“The wind power industry is experiencing turbulent times,” Nordex Chief Executive Jose Luis Blanco wrote to shareholders on Tuesday.
“Without question, our current business performance is being hit negatively by this intense competition, and especially the market turbulence caused by the newly introduced auction systems in Germany and India.”
The group now expects sales slightly below 3.1 billion euros (2.76 billion pounds) this year, compared with 3.1-3.3 billion euros previously. Analysts had, on average, expected 3.18 billion.
Order intake almost halved in the first nine months of this year to 1.11 billion euros, the group said.
“Nordex’s appalling Q3 order intake and guidance downgrade should trigger big questions for 2018,” Barclays analysts wrote.
Shares in the group were down 4.6 percent, the biggest decliners in Frankfurt's technology index .TECDAX. The stock has lost nearly two-thirds of its value this year.
Nordex’s third-quarter sales fell 4 percent to 818 million euros, higher than analysts’ 785 million average forecast in a Reuters poll. At 64 million euros, earnings before interest, tax, depreciation and amortisation (EBITDA) also beat expectations.
Blanco declined to comment on whether major shareholder Acciona ANA.MC would raise its stake beyond the current 29.9 percent once a lock-up period ends next year as part of the German group's takeover of Acciona's wind business in 2015.
Sources told Reuters earlier this year that Acciona might do so, which would trigger a mandatory offer for the whole group.
Editing by John Stonestreet and Mark Potter
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