Siemens Energy books 2.2 billion euros in charges for wind turbine issues
SIEMENS Energy on Monday (Aug 7) said problems recently unveiled at its wind turbine unit would cost it 2.2 billion euros (S$3.2 billion), well short of worst-case estimates but still casting doubt over the future of the business.
The charges will inflate Siemens Energy’s net loss more than six-fold in 2023 to 4.5 billion euros, the company said, as it published third-quarter results showing record order backlog due to strong demand.
The company also cut its sales outlook, and issued a new, lower profit outlook after withdrawing it in the wake of the disclosed issues, which include faulty components for its newer onshore turbines and ramp-up problems for offshore production.
Frankfurt-listed shares in the company were 3.6 per cent lower at 0608 GMT.
Siemens Energy shocked markets in late June when it announced a wide set of problems at Siemens Gamesa, one of the world’s biggest wind turbine makers, just weeks after it managed to fully acquire the business it formerly only partly owned.
“Our third-quarter results demonstrate the challenges in turning around Siemens Gamesa,” Siemens Energy CEO Christian Bruch said, adding that the group’s remaining divisions, including gas turbines and power converter stations, performed well.
The new set of problems at Siemens Gamesa have cost the company around a third, or more than 6 billion euros, in market value, and have put a question mark behind the business within the Siemens Energy group.
Siemens Energy, which has drafted in Alix Partners to help fix quality issues at Siemens Gamesa’s newer onshore models, said it was currently reviewing its wind strategy and would update markets at a capital markets day in November.
While in line with Siemens Energy’s own estimate of more than 1 billion euros, Monday’s cost tally for the issues is below the most pessimistic market estimate of more than 5 billion euros issued by UBS. REUTERS
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