Moody's trims Vestas

Moody's Investors Service said it downgraded to Baa2 from Baa1 the long-term issuer rating of Vestas Wind Systems A/S and to (P)Baa2 from (P)Baa1 the senior unsecured medium-term note program rating of Vestas and its subsidiary Vestas Wind Systems Finance BV. The outlook has been changed to stable from negative.

"Moody's decision to downgrade Vestas to Baa2 was triggered by weakening credit metrics and Vestas' guidance for 2023 signaling that it will take the company longer than initially anticipated to digest the negative effect of the unprecedented raw material price increases combined with the challenge to improve the underlying profitability of the Power Solutions business", said Oliver Giani, Moody's lead analyst for Vestas, in a press release.

"At the same time, the stable outlook mirrors Moody's expectation that Vestas will be able to sustainably strengthen profitability and free cash flow generation so that it returns to solid profitability by 2024 at the latest. The mid-to-long-term market outlook for wind turbines remains strong, evidenced in a high order book, a fact that will benefit Vestas," Giani added.

The improved outlook reflects Vestas’ ability to raise its prices in response to the current market disruptions, Moody’s said.

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