Vestas bullish on sales if US tax credit extended
Date: 24-Dec-01
Country: DENMARK
The U.S. stimulus package, including a two-year extension of the PTC (production tax credit), is still in jeopardy, needing approval in the Democrat-led Senate.
The package, aimed at reviving the U.S. economy, died in the Senate on Thursday after a pre-dawn passage through the Republican-led House of Representatives on disagreement over taxes and help to the unemployed as Senate Majority Leader Tom Daschle refused to bring the bill to the vote.
Congress goes on Christmas holiday at the end of the week.
"We had expected the U.S. to extend the PTC before the new year, and we still have a fragile hope that it will pass it before year-end," Vestas Chief Executive Johannes Poulsen told Reuters.
Vestas foresees 55 percent growth in sales to 10 billion crowns ($1.2 billion) this year, but only edging up to 10.5 billion crowns in 2002 due to a slowdown in the U.S. market.
VESTAS CAUTIOUS ON 2002 TURNOVER
"Right now it looks as if we have been so cautious that if the U.S. extends the PTC sometime soon, we will become more optimistic about our 2002 forecast. Our impression is that a lot of projects have come far in their development," Poulsen said.
The United States is among 2001's top three windpower markets along with Germany and Spain.
Vestas expected sales to rise to 14 billion crowns by 2003 as the United States was seen regaining momentum.
The PTC runs until the new year and provides a 1.5 cents per kilowatt-hour tax credit for electricity produced by wind energy installed before December 31.
Last week at 1430 GMT shares in Vestas dropped 3.4 percent or eight crowns to 229 crowns as the most traded stock on the Copenhagen bourse. Shares have risen 11 percent over the past two days in anticipation of a pre-Christmas approval of the stimulus package.
"Insecurity is again growing. A lot of people expected the PTC to be extended before Christmas. Nothing is going to happen in the U.S. windpower market until the politicians decide on something, PTC or no PTC," one analyst said.
Vestas is ready to install production capacity in the U.S. if the PTC is extended by at least two years, Poulsen said.
