LM Glasfiber Signs Blades Contract with GE Energy in Canada

11 March 2005

LM Glassfiber has signed a contract with GE Energy for the delivery of fibreglass blades for projects based in Canada. The company have also issued financial results for 2004, showing a 32 percent increase on 2003.

LM Glasfiber, the wind turbine producer headquartered in Denmark, will deliver blades for eight projects totalling 990 MW which GE Energy projects to build in Quebec, Canada, from 2006 to 2012. In addition, the parties have agreed on the supply of blades for another 1,400 MW capacity for the North American market over the next ten years.

As a result of the agreement, LM Glasfiber has resolved to build a blade factory in Gaspé in Quebec. The factory will have an annual production capacity of approximately 240 MW and will employ between 100 and 120 persons. The factory is expected to be operational in January 2006. The erection of a factory in Gaspé consolidates LM Glasfiber’s position as the leading supplier of rotor blades in North America. Combined with the US facility in North Dakota, the new factory will give LM Glasfiber an annual blade production capacity of more than 900 MW in North America.

“We are pleased to expand our collaboration with GE Energy with the supply of blades for their projects in Quebec”, says Anders D. Christensen, CEO of LM Glasfiber. ”We also look forward to establish a position in the growing Canadian wind energy market. The new plant is part of our strategy to continuously expand our capacity in the key geographic markets for wind energy and will increase our USD-based production capacity”.

Canada installed 123 MW of wind power in 2004, an increase of 51% on 2003. Canada is expected to become a key market, not least owing to the comprehensive wind power implementation plans in the provinces of Quebec and Ontario and the fact that the Canadian government in February 2005 resolved to quadruple its Wind Power Production Incentive (WPPI) to 4,000 MW.

The contract for Glassfiber follows news of financial stability and growth detailed in their 2004 Annual Report, published earlier this week.

The Report shows that the Group generated revenue of DKK 2,260 million (303.5 million Euros) in 2004, which is an increase of 32% relative to 2003. Earnings before interest, taxes, depreciation and amortisation and special items (EBITDA) amounted to DKK 520 million (70 million Euros), up from DKK 343 million in 2003.

The company state that “the financial performance is slightly better than the guidance provided during the year”. The company also forecast an increase in revenue of 0-5% to between DKK 2,260 million and DKK 2,375 million, and a pre-tax profit between DKK 100 million and DKK 110 million. Substantial market growth is forecast for 2005 of at least 25%, owing to strong growth in North America and Asia and continuing expansion in Southern Europe - albeit at a slower rate than in 2004. No growth is expected in the Northern European market “due to consistently contracting trends in the German, Dutch and Austrian markets. We believe that these trends may only just be balanced out by the anticipated growth in the UK and some markets in Scandinavia.”

Of additional note, the report adds that growth was particularly strong in Asia. In 2004, manufacturing output in India more than doubled compared with 2003. Furthermore, we commenced production of two new multi-MW blades and have increased output capacity at the Indian plant. In China, LM Glasfiber posted the highest level of activity to date in 2004, trebling production output relative to 2003 and expanding the capacity.

In 2004, LM GlassFiber delivered 28 different blades with lengths between 13.4 and 61.5 metres, including four new blades. The LM 37.3 P2 is a lighter and stronger redesign of our 37.3 metre blade for the popular 1.5 MW wind turbines. LM 40.1 P and LM 45.7 P are new blades for the 2-3 MW segment, which is gaining ground.

Lm Glassfiber also launched the LM 61.5 P, the world’s largest blade to date. Boasting a rotor diameter of 126 metres mounted on a wind turbine with a rated capacity of 5 MW, the turbine can generate power corresponding to the annual power consumption of about 5,000 households.

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