Wind turbine business pulls down Siemens Energy

Siemens Energy reported a net loss of US$643.4 million in the first quarter of fiscal 2023, driven in large part by ongoing troubles in its wind turbine business.

During the quarter, which ended Dec. 31, Grid Technologies (GT) was awarded the largest offshore grid connection order in Siemens Energy’s history. The platforms will connect several offshore wind farms in the (German) North Sea to the onshore grid.

Siemens Energy delivered strong order and revenue growth and better than expected cash flow. A strongly improved operational performance at Gas Services (GS), GT, and Transformation of Industry (TI) was more than offset by charges of €0.5bn at Siemens Gamesa Renewable Energy (SGRE). During an evaluation of the installed fleet, SGRE detected a negative development of failure rates in specific components resulting in higher warranty and service maintenance cost assumptions.

Siemens Energy reported loss in the first quarter, driven in large part by continued weakness in the company’s wind turbine business. (Image: Siemens Energy)

Because of those charges at SGRE, Siemens Energy had to adjust its outlook for fiscal year 2023. Management now expects Siemens Energy Group’s Profit margin before Special items between 1% and 3% and Net loss of Siemens Energy Group to be on prior fiscal year’s reported level.

The company reported “substantial” order growth in gas services, especially in the US and Brazil. Orders were up 23.3% with profits up 53.6%.

“Our order growth demonstrates that we have the right portfolio to capitalize on the energy transition,” said Christian Bruch, president and CEO of Siemens Energy AG. “Notwithstanding the charges at Siemens Gamesa, Jochen Eickholt and his team are making progress in improving the sustainability of the company. The intended delisting of Siemens Gamesa will further support the team to focus on solving the operational problems and the turnaround.”