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The persistence of adverse economic and sector conditions continue to erode Gamesa’s results which, nevertheless, in 1H12 recovers operating profitability and initiates its deleveraging process ahead of schedule in 1H12 (initially slated for the second half), generating a net cash inflow of € 100 million in 2Q12:

  • EBIT of  € 3 million (EBIT margin: 0.2%), this rises to € 12 million (EBIT margin: 0.8%) stripping out restructuring costs (1H12: € 9 million)
  • As of June, the company’s recourse1 debt stood at € 729 million (2.5x EBITDA), while more than half of consolidated debt (€ 938 million, 3.2x EBITDA) is associated with the development of wind farms already sold and scheduled for delivery in 2H12.
In the first half of 2012, Gamesa generated consolidated revenue of € 1.65 billion (+27.1%). These growth drivers offset the decline in sales of wind turbines which, in capacity terms, totalled 1,140MW (-12%). Gamesa’s sales mix remains well-diversified by market: Latin America and the Southern Cone contributed 40% of the sales volumes (in MW). The US accounted for 25%. Europe and the rest of the world contributed 17%, while India accounted for 14% and China, 5%. Gamesa’s exposure to the Spanish market is minimal.

Business volumes in the wind farm development and sale business were buoyant in the first half and were geared to meet 2H12 delivery commitments, mainly in the US. The division generated revenue of € 641 million in 1H12, 3.5 times the 1H11 performance. The company sold wind farms with capacity of 164MW in Germany, France, Poland, the US and Mexico in 2Q12. It also signed agreements during the first half covering the sale of a further 554MW in the USA, Mexico, France and Germany for delivery between this year and next. The company has 868MW of capacity in the final construction and commissioning stages, of which 575MW are subject to firm third-party sale agreements.

Despite meeting guidance in the first half of 2012 the outlook for demand and the drop in orders from Asia, a trend that is not expected to revert in 3Q12, coupled with the adjustment of output in line with order intake, has prompted Gamesa to revise its guidance for wind turbine sales and profits in 2012: the new guidance is for sales of 2,000MW and break-even at the recurring EBIT level (margin: > 0%), despite lower volumes and driven by cost streamlining efforts.
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