Danish wind turbine maker Vestas chairman resigns as company warns 2011 profit to disappoint

Source: Associated Press • Washington Post • Posted: Thursday, February 9, 2012

COPENHAGEN, Denmark — The chairman of Vestas Wind Systems A/S, the world’s largest maker of wind turbines in terms of revenue, announced he will step down after the company said last year’s profits were substantially below target.

Bent Erik Carlsen said Wednesday in a live television interview that investors wanted change, forcing him and Deputy Chairman Torsten Erik Rasmussen to decline a re-election bid at next month’s shareholder meeting.

The pair have been criticized for poor financials and a loss of market share to Chinese competitors. Last month, the company announced it would lay off 2,335 people and it has already slashed its 2012 earnings forecasts twice.

Shares in Vestas plunged nearly 11 percent to 59.50 kroner ($10.53) in Copenhagen by Wednesday afternoon.

“We’ve been through 2011 with very poor results, and it has not eased the call for renewal in Vestas’ board,” said Claus Wiinblad, head of equities at ATP, a Danish pension fund that holds approximately 10 percent of the shares. ATP was one of several shareholders asking for changes in the board last year.

The chairman’s departure comes a day after CFO Henrik Noerremark resigned. Another board member, Freddy Frandsen, will also forego re-election, though the company gave no reason for his departure.

Vestas said revenue in 2011 was €5.8 billion ($7.63 billion), €1.2 billion ($1.97 billion) lower than the original forecast and 16 percent weaker than in 2010.

“Vestas came out with a disappointing result in 2011 — no doubt about that,” Vestas CEO Ditlev Engel told a news conference.

Sluggish sales have already forced the company to slash its 2012 forecasts twice. It has also abandoned its targets for 2015 sales of €15 billion ($19.1 million) and profit margin of 15 percent.

In January, the Danish turbine maker announced it would lay off 2,335 people worldwide and that 1,600 U.S. jobs would be at risk if Congress failed to extend tax breaks for renewable energy.

The company has invested more than $1 billion in four facilities in Colorado. Its U.S. operations are headquartered in Portland, Oregon.

Vestas has also faced tough competition from China and fallout from a global recession that slowed investments in wind power.