TPI Composites, an Arizona-based manufacturer of wind blades for the renewable energy industry, returned to profit ground by posting net income of US$ 9.5 million in the third quarter after a US$ 4.1 million loss in the previous period. However, its earnings are still 56.1% down compared to same quarter of 2017.
The company results were affected by costs related to the start-up of several new production lines in plants around the world, including two locations in Mexico.
“During the third quarter, we expanded an existing multiyear supply agreement with Vestas for two manufacturing lines in our new manufacturing hub in Matamoros,” said Steven Lockard, TPI Composites’ President and Chief Executive Officer.
The company also closed a deal with GE to extend its supply agreement at one of its plants in Juarez by two years to 2022 and increase the number of manufacturing lines there from three to five.
Net sales of wind blades were US$ 234.9 million for the quarter, a slight drop compared to US$ 238.1 million in the same period in 2017.
The decrease was primarily driven by a 19.1% decrease in the number of wind blades produced, primarily as a result of the increase in lines in transition, the lost volume from two contracts that expired at the end of 2017, a delayed customer startup and by foreign currency fluctuations.
From time to time, TPI shuts down production lines to make adjustments in order to build new blade models that meet different customer specifications.
Facilities in these conditions typically spend more resources, such as labor and raw materials, which drive costs up.
TPI operates three manufacturing plants in Ciudad Juarez, Chihuahua, where the company started Mexican operations in 2002. The manufacturing hub in Matamoros, Tamaulipas started operations in the second half of this year.