Wind, that’s why turbines upset Siemens
Siemens Energy's stock crash drags down another major wind turbine maker, Vestas Wind. The analysis of the BG Saxo Study Centre
The wind turbine industry has had a rough couple of years, but the news got even worse when Siemens Energy recently announced it was spending €1 billion to fix quality issues with its onshore wind turbines.
The basket of renewable energy stocks is the worst performing this year; investors seek returns elsewhere, especially in the AI sector, which is among the most popular.
THE TROUBLE OF SIEMENS ENERGY
Siemens Energy has also withdrawn its "profit guidance" as the evaluation of the total cost is still open, currently only estimated at at least 1 billion euros.
The shares fell more than 30% on Friday to around 15 euros/share, below the IPO price. At the beginning of the week, the stock opened further negative.
THE COMPLEX PERIOD OF THE WIND SECTOR
Overall, the industry has been through a challenging period, having had to contend with steel prices which have increased by 275% during the pandemic, significantly impacting profit margins.
PROBLEMS ALSO FOR VESTAS WIND
Vestas Winds (the industry leader) has seen its return on invested capital (ROIC) decline in recent years to its current level of 13%. In a growing industry, this figure should be over 20%, indicating that in fact the entire industry is experiencing problems. Vestas Winds closed last Friday down almost 6%.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/siemens-energy-vestas-eolico/ on Tue, 27 Jun 2023 05:36:14 +0000.