Energy technology: Siemens Energy: Business is booming – there is no profit

Energy technology: Siemens Energy: Business is booming – there is no profit

Business at the energy technology group is picking up sharply. Only the result still looks bad because the wind power business continues to make losses. CEO Bruch is optimistic.

More sales, more orders – and yet the energy technology group Siemens Energy has posted high losses. The wind power business at Siemens Gamesa also weighed on earnings in the second fiscal quarter from January to March. In the end there is a minus of 189 million euros after taxes, as the group announced on Monday in Munich. For the year as a whole, Energy now expects even more losses than in 2022. Nevertheless, CEO Christian Bruch sees a positive future – especially for the wind sector.

Because on the one hand Gamesa is the problem child in the group, on the other hand it is also a beacon of hope. “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 Bruch, speaking of an expected “wave” of tenders and prices that have risen significantly in recent months, as well as better contractual terms for wind power.

problems from the past

But at the moment the problems from the past still have Gamesa under control, because there are usually years between the conclusion of a contract and the implementation of a project. This means that deals are still being processed that contain bad prices and are not sufficiently protected against cost increases. In addition, there are still problems with a turbine model. These problematic projects will still be felt for 12 to 18 months, said Bruch and CFO Maria Ferraro.

Beyond the earnings numbers, Energy had a strong second quarter. Sales increased nominally by 22 percent to a good 8 billion euros, incoming orders by 55 percent to 12.3 billion euros and the order backlog even to the record value of 102 billion euros. “The strong order intake confirms our very good positioning in the market for energy transition technologies,” emphasized Bruch.

Forecast adjusted

Accordingly, the forecast for sales was adjusted upwards. It is now expected to grow by 10 to 12 percent, several percentage points more than previously forecast. The expectation of the margin, on the other hand, was adjusted downwards because of Gamesa – and with it the earnings forecast.

You knew that 2023 would be bumpy, said Bruch. After all: In the second half of the financial year, things should also get better at Gamesa. The market environment is basically positive, he stressed. And the problems that you still have can be solved.

Source: Stern

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