1Q 2017 results
Reported results surprised positively (again) with growth rates well above the consensus. Volume sales +41%, Sales +45%, recurrent EBIT +53%, Net group profit +47%. Net cash fell from €682mn in December 2016 to €257mn, reflecting a –€329mn net cash from operations in 1Q17 resulting from a –€509mn investment in OWC. Although the first quarter is usually negative for these two measures, the decline was far more acute than what we were used to see in the first quarter, a negative point to watch in the coming quarters.
Orders received amounted to 827MW, this is down –20% from 1Q16 and we view this as a negative. Gamesa expects the order intake to recover along the year. The management confirmed the 5,000 MW guidance given for 2017e.
Our Hold recommendation and target price of €21.16 are unchanged.
Siemens Gamesa Renewable Energy is a holding company. Through its subsidiaries, Co. is engaged in the business of renewable energy sources, primarily wind power but also including solar energy where its acts as a supplier and manufacturer of technological products, installations and services. Co. is organized along the lines of: promotion, construction and sale of wind farms, engineering, design, manufacture and sale of wind turbines, manufacture of thermic and photovoltaic solar components, promotion and sale of photovoltaic solar farms. Co. also participates in both Spanish and European working groups aimed at establishing priorities for its sector's research & development work.
Bankinter S.A. is a Spanish brokerage firm established in 1989. The company's line of business includes the provision of market research and trading services for Equity and Fixed Income products.
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