Repair bill hits Clipper Windpower

By John O’Doherty
Published: May 15 2009 09:05

Losses at Clipper Windpower have widened in spite of a jump in sales as the maker of wind turbines was hit by defective turbine components and a recent slowdown in demand.
Pre-tax losses for the full year to December grew 63 per cent to $313m (£206m) on revenues that were 30 times as high as the previous year’s. Sales jumped from $24m to $734m.
Loss per share rose 43 per cent to $2.56. Clipper sold 238 turbines in 2008 compared with nine in 2007.
The losses were the result of a $300m programme of repairs on defective drive trains and rotary blades after defects were discovered in some Liberty-class turbines.
The company has completed half the “remediation” work on the defective turbines that are already installed. The rest of the work will be finished by the third quarter.
As a result of the global recession, a number of its customers have deferred deliveries.
Clipper still expects to deliver between 300 and 325 turbines this year.
At the start of the year the company slashed headcount by 90, a reduction of 11 per cent of its total employees and 30 per cent of its turbine production workforce.
“Our customers need financing in order to buy our turbines and finance their wind farm projects. So, as a result of the crash in the debt markets, our customers were not able to finance their purchases in turbines from us,” said Doug Pertz, chief executive.
“None of our customers has cancelled orders – they’ve just pushed them out.”
However, the company is looking forward to a boost in renewable investments from the US stimulus package.
“We think the stimulus package and the whole policy that the Obama administration has with both renewables and climate change will be extremely positive for the wind industry, for renewables and for Clipper,” Mr Pertz said.
“But while the policy is out there, and the laws have been passed, the implementation of it – the rules and the money – is not there yet.”
He was optimistic that policy measures to encourage capital markets to lend to the wind power sector would start to take effect “some time in the middle of this year”.
Shares in Aim-listed Clipper Windpower closed up 3p, or 2.4 per cent, at 129p.
Copyright The Financial Times Limited 2009