Siemens Energy reviews outlook as troubles at wind division deepen

Siemens Energy AG starts trading after IPO

By Christoph Steitz

FRANKFURT (Reuters) -Siemens Energy is reviewing its full-year outlook after wind turbine division Siemens Gamesa unveiled deeper-than-expected operating problems and rising costs that together triggered a substantial quarterly loss.

Siemens Energy also said the operating environment had become more challenging due to the war in Ukraine as well as sanctions imposed on Russia, adding it could not rule out further negative effects on sales and profits in 2022.

So far, the company has expected a margin on adjusted earnings before interest, tax and amortisation (EBITA) before special items in a range of 2% to 4% in 2022. Sales were expected to develop in a range of negative 2% to plus 3%.

The company pointed to Siemens Gamesa, in which Siemens Energy owns 67%, as a reason for the outlook review. Siemens Gamesa earlier cited ramp-up problems of its next-generation class of onshore turbines, which it said were “more complex than previously understood”.

The Spanish-listed firm also blamed “further pressure on energy, commodities and transportation costs, availability of key turbine components, harbor congestion, and delayed customers’ investment decisions” for a 307 million-euro ($331 million) operating loss in the second quarter.

Siemens Gamesa Chief Executive Officer Jochen Eickholt, a former Siemens Energy board member who took over at the wind turbine maker in March to get a better handle on the situation, said management was now working on a turnaround programme.

“In the six weeks since taking over as CEO I have been asking questions and drilling down into every part of the business to get an understanding of the issues and coming to conclusions about how to address them,” he said.

Siemens Energy’s second-quarter order intake fell 27.5% to 7.9 billion euros and the group swung to an adjusted loss before interest, tax and amortisation before special items of 21 million euros, down from a 288 million-euro profit last year.

($1 = 0.9270 euro)

(Reporting by Christoph SteitzEditing by Chris Reese, Jonathan Oatis and Bernard Orr)