August 14, 2009 / 1:12 PM / 9 years ago

UPDATE 2-Hanwei Energy profit slumps with waning wind sales

* Q2 profit drops to C$158,000 from C$2.9 million

* Revenue falls 32 percent to C$12.9 million

* Wind power sales down more than 80 percent

* Sees 2009 revenue growth of 30-50 percent

* Shares drop 5.5 percent to C$1.20 on TSX (Adds details, updates stock price)

OTTAWA, Aug 14 (Reuters) - Canada’s Hanwei Energy Services Corp (HE.TO) reported a 95 percent plunge in quarterly profit on Friday as weaker sales of wind power equipment ate into its results.

The company’s shares fell 5.5 percent.

Hanwei, which sells mainly in China, said shipments of its wind turbines and blades are expected to increase over the next six months, based on customer schedules.

The company also repeated its 2009 forecast for revenue growth of 30 percent to 50 percent, with improved earnings per share and profit margins, which it did not quantify.

For the three months ended June 20, Hanwei said profit fell to C$158,000 ($146,296), or nil per share, from C$2.9 million, or 5 Canadian cents a share, in the same period last year.

Revenue declined 32 percent to C$12.9 million.

Sales for Hanwei’s wind power business fell to C$1.4 million from C$8.1 million as it delivered lower-cost equipment than in the year-before quarter.

Revenue from Hanwei’s oilfield pipes business, which accounted for 87 percent of the quarterly sales, rose 15 percent to C$11.2 million.

In June, the company cut its 2009 revenue growth forecast to the 30 percent to 50 percent range from an earlier forecast of 40 percent to 60 percent. It blamed a flat oil pipe business and delayed wind power deliveries.

The company also said on Friday that it has secured the supply chain and funding needed to deliver 118 megawatts of wind power equipment to Daqing Ruihao Energy Technology Co in China. The majority of those deliveries, which are part of a larger deal to supply 1,200 MW of wind power products, are expected in the second half of 2009 and early 2010.

Vancouver, British Columbia-based Hanwei, which entered the wind business in 2007, has more than 1,000 staff in China.

Hanwei shares fell 7 Canadian cents, or 5.5 percent, to C$1.20 on the Toronto Stock Exchange on Friday morning. ($1=$1.09 Canadian) (Reporting by Susan Taylor and Chakradhar Adusumilli in Bangalore; editing by Peter Galloway)

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