Siemens Energy blames wind-down of Russia business for wider 2022 loss

Published Mon, Aug 8, 2022 · 05:54 PM

SIEMENS Energy on Monday (Aug 8) blamed a 200 million euro (S$281.4 million) charge related to the wind-down of its Russian business for a wider net loss in 2022, but said it was still prepared to maintain turbines for the Nord Stream 1 Russian gas pipeline.

The supplier of equipment to the power sector said that its Russian business activities could be sold or wound down, and the company was in touch with public authorities to work out the details.

“Of course implementing this is not trivial in the current environment,” Siemens Energy chief executive Christian Bruch said.

Shares in the company were down 2.8 per cent just before 9am in London, having pared earlier losses, but were still underperforming the broader sector.

Siemens Energy said its 2022 net loss would exceed last year’s 560 million euro loss by the 200 million euro charge, which is reported as a special item. It previously expected its 2022 net loss to be similar to last year’s.

The group, which was spun off from Siemens, said in March it would stop all new business in Russia following Moscow’s invasion of Ukraine that began on Feb 24. Sales in Russia accounted for a low single-digit percentage share of Siemens Energy’s total sales last year of 28.48 billion euros, it has said.

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Despite the planned exit from Russia, Bruch said Siemens Energy was prepared to keep maintaining the turbines in operation at the Nord Stream 1 Portovaya compressor station, if customer Gazprom wanted it.

Siemens Energy is in talks with the Russian state company over the transport of a turbine that is stuck in Germany following maintenance, carried out by Siemens Energy, because of disagreements between Berlin and Moscow over the documents needed to move it.

Nord Stream 1, which usually transports a third of Russia’s gas exports to Europe, is running at just 20 per cent capacity as a result, Moscow has said, of faulty or delayed equipment.

Bruch also said ongoing weakness at wind turbine divisions Siemens Gamesa were a drag on quarterly results and that he expected the company’s new leadership to implement a rigorous turnaround plan.

Sources told Reuters a week ago that Siemens Gamesa was considering cutting around 2,500 jobs, or around 9 per cent of its total workforce, to combat higher raw material prices and product delays that have caused it to issue profit warnings.

To tighten its control over the group’s issues, Siemens Energy announced a 4.05 billion euro cash bid for the 33 per cent it does not already own in the Spanish-listed company, plans it expects to be confirmed by local regulators in the coming weeks. REUTERS

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