Copenhagen Stock Exchange: Focus: The Debt Situation In The Wind Turbine Industry

The market conditions in the wind turbine industry have changed in recent years and the growth prospects look gloomier. Focus has therefore shifted from the growth potential to the development in the companies' capital structure, cash-flow and earnings capacity.

In Focus no. 50 Equity Analyst Bjørn Schwarz, Sydbank Markets, describes three different scenarios for the development of the wind turbine industry: recession, moderate upswing, upswing. The scenarios have different consequences for the development in debts and interest cover, which are exemplified on the basis of NEG Micon and Vestas.

Especially the wind turbine industry has to a high degree been affected by policy-induced subsidy schemes, and historically this dependence has meant wide fluctuations in marketing opportunities on the individual markets and impeded accurate forecasts as regards the market trends and capacity requirements within the production.

Bjørn Schwarz concludes that the wind turbine manufacturers' own endeavours to control and reduce the working capital should be seen in relation to the many market related factors which also affect the working capital and which either facilitate or impede attainment of the companies' ambition as regards the development in working capital.

Read the article "The debt situation in the wind turbine industry" in Focus no. 50 on the website of the Copenhagen Stock Exchange www.xcse.dk/uk.