Siemens Energy Company
Energy company Siemens on Monday reported a record third-quarter net loss, after it was hit with costs of 1.6 billion euros ($1.7 billion) to fix technical problems with onshore wind turbines.
The group had warned in June that quality problems at its troubled Siemens Gamesa wind unit were worse than previously thought, sending the stock down more than 30 percent.
After an initial estimate that showed repair costs would exceed one billion euros, Siemens Energy announced an allocation of 1.6 billion euros, to solve problems affecting “certain fan blades and main bearings on some platforms”.
The amounts earmarked for the repair severely affected the company’s overall performance in the third quarter of the fiscal year, which fell to a net loss of €2.9 billion.
The company had recorded a loss of 564 million euros in the same period a year ago.
The company’s results also declined due to additional costs amounting to 600 million euros in the offshore wind energy sector, due to “high production costs” and difficulties in increasing production capacity.
Energy company Siemens said its results were also affected by a write-down of 700 million euros in deferred tax assets during the quarter.
Looking ahead, the group expects a larger net loss for the full year of around €4.5 billion, compared to a loss recorded by the company over the past year of €712 million.
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Siemens Energy set up a “special committee to conduct a detailed investigation of quality and productivity issues at Siemens Gamesa”.
The company also plans to present an update on its wind energy strategy to investors in November.
However, Christian Bruch, CEO of Siemens Energy, expressed optimism about the future.
The company saw a jump in orders during the third quarter, with orders in the Siemens Gamesa unit alone more than doubling year-on-year.
“More than ever before, we believe in the potential of wind energy,” Brosh told reporters.
Long-running problems at the Gamesa unit last year led energy firm Siemens to take full control of it, but the hoped-for turnaround has yet to materialize.
The problems with the Gamesa unit come at a difficult time for the wind industry in general in Europe.
Despite the growing demand for clean energy, the sector has been hit by rising material prices, constant disruptions in supply chains and strong competition from China.
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2023-08-07 10:51:13
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