Energy

Brazil's WEG Q3 profit up 13%

Brazilian equipment manufacturer WEG posted net profits 13% up in the third quarter of 2014

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31/10/2014 19:02
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Brazilian equipment manufacturer WEG posted net profits 13% up in the third quarter of 2014, as it gained sales of generation and electrical infrastructure kit – including wind turbines and small-hydro generators – amid a slowing economy.

 

Net profits rose to R$258.6m ($107.9m) from a year-earlier R$228.9m.

 

Net revenues rose to R$2.1bn in the quarter, up 17% from R$1.8bn in the same period a year ago.

 

Although the company didn't give details, the generation, transmission and distribution division accounted for 24% of total revenue, from 23% a year ago.

 

An increase in sales from abroad – which account for about 50% of the total – also contributed to the result.

 

At the same time, the sale of industrial electrical equipment and machines fell to 58% of total revenue from 60% by the same comparison.

 

Brazil's economy is slowing down and is expected to grow just 0.3% this year.

 

The company said that the biggest demand came from renewable energy generation equipment, including wind and small-scale hydro, as Brazil moves to reduce dependence on large hydro to avoid the effects of droughts on power generation.

 

“We continue to note growing demand for wind power generation and an increase in feasibility of other generation technologies including small hydro, biomass and even solar power,” the company said in a statement.

 

The expectation is that the demand for this equipment continues to grow into 2015.

 

WEG is currently producing 2.1MW turbines licensed from the US's Northern Power Systems in 2013.

 

The company says the turbine has very high local content, making it possible to finance it through the National Development Bank (BNDES).

 

WEG has currently sold 167MW of these machines, accounting for about 1% of total number of wind farms built and under construction through to 2018 in Brazil.

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