Nordex: High demand but profitability issues

Last Updated: 18. Januar 2024By

Last year was a record year for wind energy development, according to current figures from the Wind Energy Agency. More than 3.5 gigawatts (GW) of newly installed and nearly 7.5 GW of approved capacity brought a significant boost for wind energy in 2023. By the end of 2023, around 28,700 wind turbines with a total capacity of 60.9 GW were turning in Germany.

The Hamburg-based wind energy plant manufacturer Nordex also benefited from this boom, with its order intake increasing by 16% in 2023. Before going into detail about the good order situation, I would like to briefly introduce the company to you.

Nordex SE in focus Founded in 1985, Nordex SE is engaged in the development, production, and maintenance of onshore wind turbines. In some markets, Nordex also acts as a project developer. Since the merger with Acciona Windpower in 2016, Nordex has become one of the largest manufacturers of wind turbines worldwide.

The focus of the Hamburg-based company is currently on wind turbines in the 4+ to 6+ megawatt (MW) class (MW = megawatt), which are designed to meet the market requirements of countries with limited expansion areas and regions with limited grid capacities.

Nordex has production facilities in Germany, Spain, Brazil, the USA, India, and Mexico. There, the company produces nacelles, rotor blades, and concrete towers. In addition, the company is represented with branches and offices worldwide in more than 30 countries.

The Hamburg wind energy specialists have installed over 44 gigawatts (GW) of wind energy capacity in more than 40 countries so far. The company currently employs around 9,000 people. The headquarters of Nordex, with the executive board and central corporate functions, is located in Hamburg, and the legal domicile is in Rostock. Nordex shares are listed on both the technology index TecDAX and the MDAX.

Good order situation in 2023 Nordex was able to increase its order intake in 2023 by 16% to a total of 7.4 GW with 1,270 wind turbines. In the previous year, the order intake had been 6.3 GW with 1,235 wind turbines.

Overall, Nordex received orders from 23 countries in the past year, with an average sales price in euros per megawatt capacity (ASP) of 0.84 million euros/MW (2022: 0.84 million euros/MW). Europe accounted for 86% of the total order intake, with 19 countries. The largest European individual markets were Germany, Turkey, Spain, and Sweden.

The Latin America region accounted for 8% of the order volume, with Brazil and Chile. The North America region accounted for 4% of the orders, with Canada. The remaining orders, with a volume of 2%, came from South Africa.

Many orders in the fourth quarter of 2023 The order intake at Nordex was particularly strong in the fourth quarter of 2023: 420 wind turbines with a total capacity of almost 2.5 GW were ordered here. This represents an increase of almost 30%.

Most of the orders in the fourth quarter of 2023 came from Europe. 92% of the orders received by Nordex in the fourth quarter of 2023 were from European countries. The remaining 8% came from non-European regions. The largest individual markets in the fourth quarter were Germany, Sweden, and Spain.

However, the upswing in orders did not give a boost to the Nordex share price. In particular, the rising interest rates are putting increasing pressure on the capital-intensive wind power industry. Therefore, the Nordex share price has been languishing at a low level for months.

Even though the current increase in order intake is encouraging, Nordex has been reporting operating losses for years. And this is precisely the reason why the Nordex share price is trading at the same level today as it did in spring 2019, despite high demand and sales numbers.