Munich The Siemens group posted high losses in the past quarter due to a billion-dollar write-down on its stake in Siemens Energy and other burdens from the withdrawal from Russia. The bottom line was a minus of a good 1.5 billion euros, Siemens announced on Thursday. It is the first quarterly loss in almost twelve years.
Without these special effects, the Dax group is still solid. Siemens also felt challenges such as the lockdowns in China and the increased cost of materials. However, in the third quarter of the financial year, sales increased by a comparable four percent to 17.9 billion euros. Growth has thus slowed further: In the first quarter of 2021/22, Siemens had increased sales by a comparable 17 percent, and then by seven percent in the second.
The operating result of the industrial businesses improved – also thanks to sales proceeds – by 27 percent to 2.9 billion euros. That corresponded to a margin of 17 percent. On average, analysts had expected an increase in sales of three percent to 17.5 billion euros and an operating margin of a good 18 percent in the industrial business.
“In a market environment with persistently high demand, we have successfully taken advantage of significant opportunities,” said Siemens CEO Roland Busch. The group has “the right strategy to be successful even in uncertain times”.
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On the way to becoming a digital company, however, Siemens first caught up with the past. The company has to write off 2.7 billion euros on the remaining stake in the spun-off energy technology division because of the price losses at Siemens Energy. That had already been announced. The Munich-based company still holds a total of 35 percent of Siemens Energy AG.
Share has lost value
Siemens Energy shares have fallen about 30 percent since the beginning of the year. Due to the ongoing crisis at the wind power subsidiary Siemens Gamesa, Siemens Energy posted a loss of more than half a billion euros in the third quarter of 2021/22. Those close to Siemens emphasized that the depreciation was purely an accounting effect that did not affect the cash situation.
On the way to becoming a digital company, the CEO has to deal with legacy issues.
(Photo: via REUTERS)
The second special charge was the exit from the Russian business. Siemens initially stopped new business and then announced its complete withdrawal. This means that the service and maintenance business will also be discontinued. In the second quarter, this already resulted in charges of EUR 600 million. Now another 600 million euros have been added.
Siemens largely confirmed its forecasts for the year as a whole. However, the depreciation effect is now calculated out of the net profit. Siemens had recently expected sales growth of six to eight percent for the year as a whole. Earnings per share after taxes should increase from 8.32 to 8.70 to 9.10 euros. Because of the write-down on the Siemens Energy stake, the forecast was put to the test.
More: Siemens Energy is in the red because of the ongoing crisis at Siemens Gamesa.