Munich The energy technology specialist Siemens Energy is still not getting the problems in the wind power business under control even after the complete takeover of the crisis subsidiary Siemens Gamesa. In the current financial year, the Dax group is even expecting further increasing losses due to the deep red figures for renewables.
“The success of the wind business remains the basic requirement for us to become a profitable market leader in the field of energy transition,” said Siemens Energy CEO Christian Bruch on Monday when the quarterly figures were presented. However, the integration of Siemens Gamesa is on the right track and the other businesses, such as the power plant division, are doing well.
At Siemens Gamesa, however, the loss in the second quarter of 2022/23 (September 30) rose again by almost 20 percent to 386 million euros. Siemens Energy had completely taken over the crisis subsidiary Gamesa in order to have better control. The parent company now holds 98 percent of the shares in the Spanish subsidiary and wants to force the remaining shareholders out of the company through a capital reduction.
The wind power division suffers from a number of problems. The entire industry is struggling with the fact that the increased prices for steel, for example, could not be passed on to customers because the contracts did not provide for this. New orders are more profitable for all providers. But the incoming orders still have to “sell”, said Bruch. So the industry is still working off the old, loss-making orders from the past.
Nordex also increased the losses
As a result, the competitor Nordex also increased its net loss in the first calendar quarter from 150 to 215 million euros. In contrast, the traditionally more profitable Vestas made a small profit of 16 million euros. “The wind industry continues to be challenged by political uncertainties, slow approval processes and high inflation,” said Vestas CEO Henrik Andersen.
At Siemens Gamesa, there were many homegrown problems. Only a few synergies were used between the onshore segment with the wind turbines on land and the offshore segment.
In addition, the launch of the first jointly developed platform 5.X went poorly. Siemens Energy changed the boss several times and finally sent the proven crisis manager Jochen Eickholt to Spain.
All sides trust this to turn the tide – but it takes time. “Eickholt has set some points in the right direction,” it is said in supervisory board circles. The orders that are newly brought in are more profitable. In addition, the top manager works intensively on the processes.
The long-term prospects for the industry are good
In the longer term, however, all providers are optimistic. “There is a market that will become a wave,” said Siemens Energy boss Bruch. The question will rather be who can build all the wind turbines that are needed there. “We are at the beginning of a major investment cycle in the energy industry.”
However, Siemens Gamesa remains a permanent burden for the parent company. Siemens Energy originally wanted to significantly reduce the previous year’s loss of 647 million euros in the current 2022/23 fiscal year, which ends on September 30. After a weak first quarter, the forecast was lowered once, and Bruch now expected a net loss at the previous year’s level.
After the second quarter, expectations have been reduced again. The Dax group now assumes that the loss “will exceed the level of the previous year by up to a low three-digit million amount”. In the second quarter of 2022/23, the loss was 256 after 189 million euros in the same period last year.
Sales increased significantly by almost 24 percent to a good eight billion euros. The operating result was slightly positive. In view of the good development in large parts of the group, the Siemens Energy share price has meanwhile risen by almost three percent to 23 euros.
Siemens Energy has only made losses since it was spun off from the former parent company Siemens. The problems with renewables hide the fact that business with gas-fired power plants and electricity grids is very solid. Siemens Energy was even able to increase its sales forecast for the year as a whole. The group now expects an increase in revenue of ten to twelve percent. Most recently, the forecast was three to seven percent.
A report by the Handelsblatt newspaper that the division with high-voltage components is being prepared for a possible sale has caused unrest in the group. The business area includes, for example, insulators, arresters and coils for substations.
The core are the activities of the company Trench Group, which Siemens took over almost 20 years ago. According to information from the Handelsblatt from industry circles, the unit with 2,500 employees recently achieved sales in the hundreds of millions. IG Metall criticized that it was a “questionable style” for employees to find out about the plans from the press.
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