03 March 2017
The annual result is as expected, however, KK Wind Solutions feels the market tendencies of margin erosion.
KK Wind Solutions presented its annual report for FY 2015-16 on the 1st of March 2017.
The annual result of DKK 170.1 m before tax is as expected. We see a drop compared to the 2014-15 result of DKK 181.1 m, however, approx. DKK 75 m of last year’s result was realised partly through the withdrawal from the Chinese joint venture company Chongqing kk-Qianwei Windpower Equipment Co. Ltd. The joint venture agreement has been replaced by a licence agreement, which works satisfactorily. Our cooperation partner has now obtained a rank of being no. 5 among wind power suppliers on the Chinese market.
Even though KK experiences continuous growth, profit margins are reducing. Thus, we saw a drop from 13.1 in the previous fiscal year to 12.0 this year. This is fully in line with the continued market pressure to reduce the costs of energy for wind power and hereby increase competiveness and a sign of the consolidation within the wind industry.
Organisational development Fiscal Year 2015-16
In October 2015, the service activities was handed over to a new established subsidiary in KK Group. This was done to underline the strategic focus of this specific area, a strategic focus which has proven to be right. As previously announced, KK Group furthermore got a new owner in the autumn 2016. The Scandinavian investment company Solix took over from PFA and MajInvest. The new owner fully supports the strategic direction already laid out in the KK Group. CEO Tommy G. Jespersen says: “Having the new owner buying in on our business strategy just confirms our strong belief in the plans we have made for KK Group.”
We innovate to integrate
During the past year, we have increased our cooperation with customers, suppliers and other external parties e.g. universities on developing and providing system solutions in all parts of the value chain. Going forward, innovation and research is a very important part of KK Group’s aim to be a leading company within system solutions.
“According to public forecasts, the global market for wind is expanding and looking to the order books in KK Group, we can only confirm this picture,” says Tommy G. Jespersen.
Going forward, KK Wind Solutions’ will still have Europe and the USA as main markets and to some extent also Asia, in particular India where the wind market is facing growth. Due to these market trends, KK Group has chosen to establish a subsidiary in India in 2017.
The KK group expects an increase in turnover in the FY 2016/17 but with an annual result on par with or slightly higher than 2015/16 due to a continued pressure on the margins.
Carina Britorn Vestergaard
Marketing & Communication Manager
Phone: + 45 5122 3949
Margins under pressure