DEEP RESEARCH · CS WIND/WIND POWER

CS Wind and Vestas 2025 First-Quarter Results and Wind Industry Trends

A report reviewing earnings surprises, AMPC effects, order-backlog risk, and global wind growth drivers

Written: 2025-05-11 · Wind industry/company earnings · Naver Blog

0. Bottom line first

Interpretation: Still, CS Wind’s results include a one-off profit of KRW 40.6 billion and fourth-quarter deferred revenue recognition, so that needs to be considered. I also need to watch second-half contract cancellation issues, the possibility that US AMPC tax benefits may shrink, and the possibility that the 2025 order backlog declines. For now, I mostly intend to watch.

1. 2025 First-Quarter Summary: CS Wind vs. Vestas

2. Why First-Quarter Results Were Strong

CS Wind: Demand Growth, Cost Ratio Improvement, and AMPC

Official fact: Demand expansion from key customers and cost-ratio improvement drove earnings improvement. In the tower segment, production volume increased on global onshore wind demand, especially strong US demand.

US-bound tower revenue deferred from the prior quarter was recognized in the first quarter, and about KRW 40.6bn of Advanced Manufacturing Production Credit, or AMPC, under the US Inflation Reduction Act was reflected, lifting tower margins. Tower OPM rose from 5.9% in the previous quarter to 9.9%, and even excluding the AMPC effect, the margin improved to 4.2%.

The offshore wind substructure segment, after restructuring the acquired Bladt business, focused on profitability and secured price increases and delivery incentives, maintaining a high OPM of 22.6%. The source also mentions 26.6% for substructure OPM in the earlier earnings summary, so both figures are preserved as stated in the source.

Vestas: Higher Selling Prices and Service Business

Vestas improved profitability through higher wind turbine selling prices and stable growth in the service segment. Over the past two years, turbine manufacturers raised product prices due to higher raw-material and logistics costs, and that effect began to appear in 2025, improving margins per project.

The average price of new first-quarter orders was €1.24mn per MW, above expectations. The service business generates stable, high-margin earnings based on long-term contracts of more than 20 years, and service contract backlog at the end of the first quarter reached €369bn, expanding from the prior year. The dual model of turbine sales plus service acted as an earnings buffer.

Regionally, recovery in the global market excluding China worked in Vestas’s favor. US IRA policy is expected to expand US wind investment, and Europe is increasing wind auction volume for energy security and carbon reduction. European wind auction volumes, including Germany, rose sharply in 2023; Germany’s annual 11GW onshore wind auction was mentioned as +72% YoY.

3. Three-Year Backlog and Segment Flow

CS Wind receives orders across two pillars: onshore wind towers and offshore wind substructures. The tower segment has maintained a relatively steady flow through long-term supply contracts with major global turbine makers such as Vestas. Over the past three years, regional supply expanded through diversified production bases including the Americas and Asia, and US market strength kept orders solid.

By contrast, the Bladt substructure business acquired in 2022 lacked aggressive new orders because the company focused on profitability improvement immediately after the acquisition. Hana Securities analyzed that this year’s orders are expected to be weak in the first half and stronger in the second half, with demand expected mainly from European offshore wind and US onshore wind. The company is also strengthening order competitiveness by expanding its China subsidiary and offshore wind production capacity at its Vietnam plant.

4. Forward Risk Factors

AMPC Tax Benefit Durability

Whether the US AMPC benefit, which contributed significantly to CS Wind’s profitability, continues is important. Depending on the US political environment, IRA tax benefits could be reduced or changed. The market had concerns that AMPC might not be received after President Trump’s return. The industry expects detailed AMPC rules to be finalized from the first half to early second half of this year, reducing uncertainty, but early termination or stricter conditions would pressure tower margins.

Securing New Orders

Unlike Vestas, CS Wind’s offshore wind substructure segment faces concern that work may decrease after 2025. If an order gap in large offshore wind substructures becomes reality, revenue in that segment could fall sharply, making European and Asian offshore wind project wins this year crucial. Vestas also needs technology innovation and price competitiveness as competition continues with GE, Siemens Gamesa, and Chinese players such as Goldwind.

Costs, Supply Chain, and Policy Risk

Higher raw-material prices such as steel, logistics costs, and project financing costs from higher interest rates are near-term risks. CS Wind passed through part of the cost increase to customers, but another surge in raw-material prices could pressure margins. Vestas recorded a large loss in 2022 due to cost increases, so continued cost management and hedging are important.

Offshore wind is both a growth opportunity and an area with major policy and permitting risk. The source mentions the early-2025 suspension of New York’s Empire Wind project due to government delays. Project delays or cancellations could expose CS Wind to order cancellations and idle-equipment problems. Grid-connection delays, permitting delays, localization requirements, and trade barriers can also add costs.

5. Global Wind Power Market Size Trend

Over the past decade, the global wind power industry has grown rapidly. Market value expanded with installation volume, and policy support in major markets including China and the US drove investment higher in the 2020s. Investment rose even as equipment cost per unit of capacity declined because total installation scale expanded, the higher-cost offshore wind mix increased, and raw-material and labor cost inflation was partly reflected.

6. Market Outlook and Growth Drivers

The International Energy Agency stated in a 2023 report that annual wind installations, currently around 115GW, need to more than triple to around 340GW by 2030. The regional growth drivers are as follows.

United States

The IRA is expected to energize the US wind market over the next 10 years. It provides long-term extension of the wind production tax credit, investment tax credits for generation facilities, and AMPC. New onshore wind installations are expected to rise significantly after 2024, and offshore wind may gain medium- to long-term momentum. In the short term, however, tariffs and permitting remain variables.

Europe

The EU built an ambitious growth roadmap centered on offshore wind for energy security and carbon neutrality. Germany, the UK, the Netherlands, France, and others are running multi-GW offshore wind auctions every year from the mid-2020s. In late 2023, the European Commission announced the Wind Power Package, including faster permitting, grid investment, and supply-chain support. Onshore wind capacity is also scheduled for major expansion by 2030 under RepowerEU.

China and Other Regions

China is the world’s largest wind market and set high renewable generation-share targets under its 14th Five-Year Plan through 2025. But because China is a self-sufficient ecosystem with limited access for foreign companies, Vestas and others are focusing on growth in Asian markets outside China such as India, Australia, and Vietnam.

Other growth drivers include emerging markets such as India and Brazil, improved wind economics, and rising RE100 renewable procurement demand. As electric vehicles increase electricity demand and domestic renewable infrastructure becomes important for energy security, wind power may face an exceptional growth opportunity over the next five to ten years.

7. My Final View

Interpretation: CS Wind and Vestas’s first-quarter results created a reason to revisit the wind industry. But for CS Wind, I need to weigh the one-off nature of the KRW 40.6bn AMPC benefit and fourth-quarter deferred revenue recognition, the substructure backlog burden, and possible second-half contract cancellations.

So rather than investing immediately, I think it is better to confirm whether the 2025 backlog declines, whether AMPC benefits shrink, and whether new orders actually recover in European offshore wind and US onshore wind.