Siemens Gamesa's CEO resigns after run of profit warnings

[FRANKFURT] Siemens Gamesa Renewable Energy chief executive officer (CEO) Andreas Nauen resigned after project delays and cost overruns led to profit warnings at the subsidiary of Siemens Energy.

Jochen Eickholt, a Siemens Energy executive board member, will succeed Nauen as CEO on Mar 1. Eickholt, 60, has a track record of restructuring underperforming businesses and will be charged with fixing the issues that have plagued Siemens Gamesa.

"His proven ability to turn around underperforming businesses and his vast leadership experience will be key elements to successfully implement the necessary changes and improvements at Siemens Gamesa," Siemens Energy chairman Joe Kaeser said in a statement.

Turbine makers are grappling with rising commodity costs and pandemic-related disruptions to supply chains. Surging prices for energy, steel and copper have squeezed profit at Siemens Gamesa and its rivals. That's leading to tough conversations with customers, who may not be able to cope with higher expenses.

Siemens Gamesa is also facing difficulties scaling up one of its new turbine models, known as the 5.X platform. Volatile markets have impacted investment decisions by some of its customers, resulting in project delays.

Siemens Gamesa reported a loss of 309 million euros (S$470.6 million) for the first quarter of its 2022 fiscal year and warned that inflation will continue to weigh on margins.

The issues at Madrid-based Siemens Gamesa already weighed on Siemens Energy's results last year, frustrating the German firm's management and fuelling speculation the parent might try to buy out other investors to seize full operational control.

Siemens Energy last month lowered its full-year outlook due to mounting losses at its renewable subsidiary. BLOOMBERG