Danish wind turbine manufacturer, Vestas, has reported weaker operating profits than it was expecting, however its revenue has increased by €1.2 billion.

The firm's net income dropped 34% in the second quarter, compared to the same period last year.

The company was also forced to lay off 1,142 employees in Denmark and 425 were made redundant in the UK last week.

In a statement the company said: "Since the autumn of 2008, the credit crisis has impacted the wind power industry, causing limited order intake during the past nine months and keeping it well short of the level of the same period in 2007/2008. Many customers have been unable to finance scheduled projects either due to increasing funding costs or an actual lack of funding. Moreover, some of the banks that were previously key players in the wind turbine market are no longer active. However, the many governmental initiatives around the world are starting to have an impact, and market prospects are beginning to improve."

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In 2009, Vestas expects to make warranty provisions of 3-4% of annual revenue, against 4.0%in 2008. Provisions are made for all costs associated with turbine repairs, and any reimbursement is not offset unless a written agreement has been made with the supplier to that effect.

(CD/KMcA)