Siemens reforms all of its wind turbine businesses after making substantial losses
Siemens Energy has embarked on a review of its wind business after it suffered a sharp decline in its full-year earnings and revenue forecasts due to problems at its Siemens Gamesa unit, one of the world's largest wind turbine makers.
“ The third-quarter results demonstrate the challenges posed by the restructuring of Siemens Gamesa ,” said Christian Bruch, president and chief executive officer of Siemens Energy AG, in a release on the company's results for the third quarter of the fiscal year 2022/2023. , which ended on 30 June 2023.
In late June, Siemens Energy withdrew its profit forecast for the company due to problems with Siemens Gamesa's wind turbines.
“ This is a disappointing and serious setback ,” Siemens Gamesa CEO Jochen Eickholt told reporters in an ad hoc phone call.
In today's third quarter results release, Siemens Energy said that the result before items other than extraordinary items was negative, due to charges incurred by Siemens Gamesa for a total of 2.4 billion dollars (2.2 billion of Euro). The charges mainly refer to quality problems of some onshore platforms, as well as an increase in product costs and problems starting up the offshore activity.
“Following a substantial increase in the failure rates of some wind turbine components, an expanded engineering review has suggested that significantly higher costs than previously assumed will be incurred in achieving the targeted level of quality.” The other charges mainly refer to the increase in product costs and the challenges of starting up the offshore business,” said Siemens Energy.
“ Due to the developments of Siemens Gamesa, Siemens Energy is reviewing the current strategy and action plan in the wind sector. Details of this strategic plan will be presented at Capital Markets Day in November ,” the company added.
Due to the charges and problems of Siemens Gamesa's wind turbines, Siemens Energy Group now expects a net loss for the fiscal year 2022/2023 of 4.94 billion dollars (4.5 billion euros), about four times higher to the previously expected loss. Pre-tax free cash flow is expected to be negative by up to three-digit singles, versus the previous forecast to be positive by up to three-digit singles.
It's not enough to make wind turbines to make a profit: you also need to do them well. Reuters reported that the failure rate of Siemens Gamesa turbines varied between 15% and 30%, a very high percentage that led to the leaks mentioned above. The German quality was evidently not respected. Many things have changed over the years.
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The article Siemens reforms all of its wind turbine businesses after making substantial losses comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/siemens-riforma-tutte-le-proprie-attivita-nelle-turbine-eoliche-dopo-aver-avuto-perdite-consistenti/ on Mon, 07 Aug 2023 16:01:09 +0000.