Shares in rival wind turbine makers Siemens Gamesa and Vestas fell on Friday as a squeeze on prices caused by reduced state subsidies took its toll on quarterly profits.
The wind power industry is undergoing a period of painful readjustment as governments from Europe to Latin America rein in subsidies and turn to competitive tenders, putting pressure on prices throughout the supply chain.
“It’s challenging across the board, it’s very competitive,” Vestas’ chief financial officer Marika Fredriksson told Reuters.
Vestas’ operating profit for the January-March period of €126 million ($150.7 million) was a decline of 40 percent and also lagged analysts’ forecast of €137 million.
Majority owned by Germany’s Siemens following a merger of its wind power business with Spain’s Gamesa last year, Siemens Gamesa said adjusted operating earnings for the same period fell 40 percent to €189 million.
Shares in Denmark’s Vestas fell 4.4 percent in early trading while Siemens Gamesa traded down 3.4 percent.
Vestas’ average selling price per megawatt came in at around 740,000 per megawatt, which was flat from the previous quarter.
However, both companies cautioned it was still too early to say if prices had stabilized after a double-digit decline seen last year.
“It could appear so, but we still want to have more sustainable and long-term view on the stabilization of the market,” Vestas’ Fredriksson said.
That caution was echoed by Siemens Gamesa.
“It’s the second quarter of stable average selling price of the order intake ... (but) we’re not able to determine if this is already a trend,” Siemens Gamesa CFO Miguel Angel Lopez, told a conference call.
Most recent rankings by consultancy firms GlobalData and MAKE show Siemens Gamesa claiming the top spot in terms of sold turbine capacity last year, overtaking Vestas in a race to cater the competitive wind power sector.
Vestas is still a market leader in terms of total installed capacity, said Vestas citing MAKE.
Siemens Gamesa, which counts Spanish energy group Iberdrola among its key shareholders, kept its target for an EBIT margin of 7-8 percent this year.
Vestas still targets an EBIT margin of 9-11 percent this year.
Siemens Gamesa in February unveiled 2 billion euros in cost cuts by 2020 to close a margin gap to Vestas, both facing margin pressure as government cuts support for renewables to force them into competition with conventional energy sources.
Siemens Gamesa more than doubled its quarterly order intake to 2.5 GW, while Vestas order intake came in at 1.6 GW.
Global wind turbine makers hit by subsidy squeeze
Global wind turbine makers hit by subsidy squeeze
- Q1 profits at Vestas and Siemens Gamesa fall as renewable energy subsidies withdrawn around the world
- “It’s challenging across the board, it’s very competitive,” says Vestas’ chief financial officer Marika Fredriksson
Arab food and beverage sector draws $22bn in foreign investment over 2 decades: Dhaman
JEDDAH: Foreign investors committed about $22 billion to the Arab region’s food and beverage sector over the past two decades, backing 516 projects that generated roughly 93,000 jobs, according to a new sectoral report.
In its third food and beverage industry study for 2025, the Arab Investment and Export Credit Guarantee Corp., known as Dhaman, said the bulk of investment flowed to a handful of markets. Egypt, Saudi Arabia, the UAE, Morocco and Qatar attracted 421 projects — about 82 percent of the total — with capital expenditure exceeding $17 billion, or nearly four-fifths of overall investment.
Projects in those five countries accounted for around 71,000 jobs, representing 76 percent of total employment created by foreign direct investment in the sector over the 2003–2024 period, the report said, according to figures carried by the Kuwait News Agency.
“The US has been the region's top food and beverage investor over the past 22 years with 74 projects or 14 projects of the total, and Capex of approximately $4 billion or 18 percent of the total, creating more than 14,000 jobs,” KUNA reported.
Investment was also concentrated among a small group of multinational players. The sector’s top 10 foreign investors accounted for roughly 15 percent of projects, 32 percent of capital expenditure and 29 percent of newly created jobs.
Swiss food group Nestlé led in project count with 14 initiatives, while Ukrainian agribusiness firm NIBULON topped capital spending and job creation, investing $2 billion and generating around 6,000 jobs.
At the inter-Arab investment level, the report noted that 12 Arab countries invested in 108 projects, accounting for about 21 percent of total FDI projects in the sector over the past 22 years. These initiatives, carried out by 65 companies, involved $6.5 billion in capital expenditure, representing 30 percent of total FDI, and generated nearly 28,000 jobs.
The UAE led inter-Arab investments, accounting for 45 percent of total projects and 58 percent of total capital expenditure, the report added, according to KUNA.
The report also noted that the UAE, Saudi Arabia, Egypt, and Qatar topped the Arab ranking as the most attractive countries for investment in the sector in 2024, followed by Oman, Bahrain, Algeria, Morocco, and Kuwait.
Looking ahead, Dhaman expects consumer demand to continue rising. Food and non-alcoholic beverage sales across 16 Arab countries are projected to increase 8.6 percent to more than $430 billion by the end of 2025, equivalent to 4.2 percent of global sales, before exceeding $560 billion by 2029.
Sales are expected to remain highly concentrated geographically, with Egypt, Saudi Arabia, Algeria, the UAE and Iraq accounting for about 77 percent of the regional total. By product category, meat and poultry are forecast to lead with sales of about $106 billion, followed by cereals, pasta and baked goods at roughly $63 billion.
Average annual per capita spending on food and non-alcoholic beverages in the region is projected to rise 7.2 percent to more than $1,845 by the end of 2025, approaching the global average, and to reach about $2,255 by 2029. Household spending on these products is expected to represent 25.8 percent of total expenditure in 13 Arab countries, above the global average of 24.2 percent.
Arab external trade in food and beverages grew more than 15 percent in 2024 to $195 billion, with exports rising 18 percent to $56 billion and imports increasing 14 percent to $139 billion. Brazil was the largest foreign supplier to the region, exporting $16.5 billion worth of products, while Saudi Arabia ranked as the top Arab exporter at $6.6 billion.
