Delays in sealing new orders forced Indian wind power company Suzlon Energy Ltd to cut its sales forecast, but the company will still see full-year profits near last year's level, an executive said on Saturday.
Suzlon commissions GMDC's 19.5 Mw wind farm
The wind power industry has grown rapidly over the past decade, but the financial crisis that hit many of the world's biggest banks has choked off financing for many new clean energy projects over the past year.
That has forced turbine makers such as Suzlon and industry leader Vestas Wind Systems A/S to layoff workers and reduce output to trim their operating costs.
Suzlon, one of the world's largest makers of wind power systems, cut is forecast for full-year sales to between 1,900 to 2,100 megawatts from 2,400 to 2,600 MW previously, Sumant Sinha, Suzlon's chief operating officer, told Reuters by telephone from India.
Despite the reduced sales forecast, Suzlon will likely match the profits it posted in it previous fiscal year.
"We'll probably end up making a similar number ... plus or minus around that number," Sinha said.
In June, the company reported a full-year net profit 4.1 billion rupees for its fiscal year.
Customers have been postponing signing new contracts for the clean energy equipment because the uncertainty in obtaining financing or government subsidies.
"It's not sales lost, per se, it's because of a slight delay in orders," he said.
Sinha said a glut of orders lined up for Suzlon's fiscal fourth quarter, which ends in March 2010, could also force the company to record those revenues later than previously expected.
"There is likely to be some slipping into next year because of that," he said.
Suzlon has the capacity to produce about 1,000 megawatts of turbines per quarter, he said, and could have difficulty ramping up output in its fourth quarter because of cuts that it has implemented at many of its factories.
Its current orders stood at 1,488 MW, with 1,365 MW in international orders and 123 MW in orders from the Indian market.
Suzlon has shrunk its working capital needs by 15 per cent so far this year, enabling it to reach profitability at a lower level than last year, Sinha said.
"While there is a reduction in our guidance, we've been working to reduce our breakeven level," he said.
The Indian market, where the company has a 60 per cent market share, continues to look strong, as does the Chinese market, he said.
Suzlon bags wind turbines-supply order of Turkish firm
However, demand in the United States remains slack because of the slow pace at which the government has rolled out rules for grants and loan guarantees.
"It's a little bit disappointing," he said.
