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UPDATE 1-Vestas gives new 2010-11 fcast due to accounting shift

Published 11/22/2010, 12:40 AM
Updated 11/22/2010, 12:44 AM

* Policy change defers 2.9 bln euros in historic revenues

* Sees 2010 revenue of 6.8 bln euros, EBIT margin of 7 pct

* 2010 forecast is before 140-160 mln euro one-off costs

* 2011 revenue and earnings on par with 2010 excl one-offs

(Adds details, quote, background)

COPENHAGEN, Nov 22 (Reuters) - Danish wind turbine manufacturer Vestas Wind Systems announced on Monday a change in accounting policy that defers historic revenues and issued new revenue and earnings guidance for 2010-2011.

The company had said in its third-quarter report in late October that it was considering changing the way it books certain projects, which could have a significant effect on previous and future financial statements.

As a consequence of the accounting change, Vestas defers 2.9 billion euros ($3.97 billion) in revenues from so-called supply-and-installation contracts up to Sept. 30, 2010, the company said in a statement.

That revenue will be recognised in coming periods, and the production and shipments related to that revenue have already taken place and the company has received 2.2 billion euros in related down payments and prepayments, Vestas said.

"The deferral of revenue and related earnings has the effect that equity as per September 30, 2010, has been reduced by 739 million euros," Vestas said.

The policy change does not affect cash flow, and, in the future, the company's order backlog will be bigger than before, it said.

Vestas said it now expects full-year 2010 revenue of 6.8 billlion euros and a margin on earnings before interest and tax (EBIT) of around 7 percent before one-off costs of 140-160 million euros related to announced plant closures.

In its third-quarter report in October, Vestas had stuck to its previous 2010 guidance which had been for revenue of 6 billion euros and an EBIT margin of 5-6 percent.

The company expects 2011 revenue and earnings to be at same level as 2010 before the one-off costs, it said.

Vestas left its forecast for order intake in 2010 unchanged at 8,000-9,000 megawatts and for 2011 order intake at 7,000-8,000 MW.

(Reporting by John Acher; Editing by Jean Yoon)

($1=.7312 Euro)

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