Gamesa still weighs heavy on Siemens Energy, still boosting full-year guidance

Losses at Siemens Gamesa was more than made up for by strong performances across all other segments.
Photo: Arise
Photo: Arise

The acquisition of Siemens Gamesa continues to pull down German Siemens Energy.

Profits before special items came to EUR 41m in the year’s second quarter in 2022/23, against a EUR 49m deficit in the corresponding period last year. Analysts also guided for black bottom line figures – their far more ambitious projections set the item at EUR 151.2m.

The German industry group reports that the loss from Siemens Gamesa is more than made up for by a strong performance across all other segments.

But in the subsidiary Siemens Gamesa, the turbine manufacturing unit of the group, profits before special items stooped to a breathtaking EUR 374m deficit in the second quarter of 2023, further squeezed by a EUR 301m deficit in the same period last year.

It nonetheless outperforms analyst consensus of EUR 245.8m deficit, according to Bloomberg News.

Order intake went up some 200% to EUR 3643m, against EUR 1198m in the corresponding quarter last year.

”Orders increased sharply year-over-year, reflecting a strong quarter and a relatively low prior-year level. This was mainly due to higher volume from large orders, including the EUR 1.7bn offshore order in the UK” the energy group writes on the subsidiary’s performance.

Siemens Gamesa delisting plans approved

Siemens Energy adjusts its full-year expectations of a comparative sale of 10-12 percent, against a previous 3.7%, and a revenue margin before special items in ”the low end” of 1-3%.

The company also adjusts annual guidance of comparable revenue growth in the range of 6-10% and profit margin for special items against -11%. No specific guidance for the subsidiary appears in the quarterly report.

”Due to the financial performance in the first half-year and business volume growing faster than previously planned, Siemens Energy adjusted its outlook for fiscal year 2023,” writes Siemens Energy.

The groups upgraded guidance is based on ”higher revenue growth assumptions for all segments.”

”For Siemens Gamesa the situation remains volatile. However, we expect an improvement in the second half of the fiscal year but not compensating the weak first half,” the report reads.

Siemens Gamesa need to keep focusing on dealing with operational issues and the turnaround, primarily through execution of the Mistral program.

And the main reason for the project profit margin in the ”low end” of the guidance range of 1-3%, is the wind turbine business performance in the first half of the year.

Accordingly, net loss of Siemens Energy Group is expected to exceed prior fiscal year’s level of EUR 712m by up to a low triple-digit million amount (previously to be on prior fiscal year’s reported level),” company forecast reads.

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