Spanish wind power subsidiary Siemens Gamesa and costs of withdrawing from Russia are dragging energy technology group Siemens Energy deeper into the red. In the third business quarter – from April to June – accumulated losses of 533 million euros, as the company announced on Monday.
In the current year, the minus is already a good one billion. The company also lowered its expectations for full-year earnings. In contrast, sales in the past quarter remained stable at EUR 7.3 billion.
The problems at the wind power subsidiary Siemens Gamesa are now causing poor numbers at Energy for the fifth time in a row. The company, in which the Munich group holds around two thirds, had already reported deep red numbers last week. The situation is anything but easy, said CEO Christian Bruch. He justified the losses with a difficult market situation and “mistakes in the past”.
New management to restructure Gamesa
In order to get the difficulties under control, Energy changed the leadership at Gamesa a few months ago. The new boss Jochen Eickholt, who came from the parent company, is in the process of being restructured – one now expects a consistent implementation of the plans, which also included painful cuts.
In addition, Siemens Energy wants to take over Gamesa completely and integrate it into the group. The necessary offer is currently being examined by the Spanish stock exchange supervisory authority, said CFO Maria Ferraro. She expects a decision in the coming weeks. Overall, we are on course.
Despite all the measures, Bruch does not expect a quick solution from Gamesa. It will be years before profitability is where it wants to be.
In addition, the otherwise solid Gas and Power division suffered in the past quarter from the reduction in business in Russia, which had a negative special effect of around 200 million euros. However, the conversion should be completed by the end of the year and should not have any further major financial effects.
Maintenance of Nord Stream 1 turbine still possible
The maintenance for the turbines at the compressor station of the Nord Stream 1 gas pipeline is not affected by this dismantling, emphasized Energy boss Christian Bruch. In principle, you can continue – if you wish. The service cycle goes until 2024. However, one is dependent on the customer reporting and saying that something should be done.
Regarding the dispute over the turbine with the Russian state-owned company Gazprom and the possible financial consequences, Bruch said that he saw no contractual risks. You can clearly show “that we have done everything so that we can deliver”.
The bottom line is that Siemens Energy now expects a higher loss for the entire fiscal year, which lasts until the end of September. It will be more than the loss of the previous year by almost the amount of the burdens from the Russian business. At that time it had amounted to 560 million euros.
In contrast, incoming orders and inventories developed positively. The latter rose to an all-time high of 93.4 billion euros.
