Siemens Energy warns impact of turbine troubles to last years
SIEMENS Energy warned on Friday (Jun 23) that the impact of quality problems at its Siemens Gamesa wind turbine business would be felt for years and were not yet quantifiable, sending its shares tumbling by nearly a third.
Siemens Energy, which supplies equipment and services to the power sector, scrapped its 2023 profit outlook late on Thursday after a review of its wind turbine division exposed deeper-than-expected problems that could cost more than 1 billion euros (S$1.5 billion).
“Even though it should be clear to everyone, I would like to emphasise again how bitter this is for all of us,” Siemens Energy CEO Christian Bruch told journalists in a call.
Finance chief Maria Ferraro earlier told analysts that the majority of the hit would be over the next five years.
Shares in Siemens Energy were down 30 per cent at 0713 GMT (3.13 pm Singapore Time), with traders and analysts pointing to the fact that the extent of the company’s latest problems was still uncertain.
“Given the history and nature of the wind industry, the profit warning was not a complete surprise, but what surprised us was the magnitude,” analysts at JP Morgan said.
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Issues at Siemens Gamesa have been a drag on the parent for a long time, prompting Siemens Energy to take full control of the business after only partially owning it for several years.
The discovery of faulty components at Siemens Gamesa in January had already caused a charge of nearly half a billion euros.
Siemens Gamesa CEO Jochen Eickholt said that while rotor blades and bearings were partly to blame for the turbine problems, it could not be ruled out that design issues also played a role.
Bruch also blamed the corporate culture at Siemens Gamesa, the result of a merger of the wind turbine division of Siemens and Spain’s Gamesa, saying: “Too much has been swept under the carpet”.
He said that the setback from the quality problems was “more severe than I thought possible”.
At the same time, he said he did not believe that the full takeover of Siemens Gamesa had been a mistake.
Bruch said that the company would be able to provide a more accurate estimate of the costs from the latest problems after a full analysis of the situation by the time it publishes its third-quarter results on Aug 7. REUTERS
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