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Siemens Energy cuts outlook as fresh problems emerge at wind unit

Published 01/20/2022, 04:22 PM
Updated 01/20/2022, 05:03 PM
© Reuters. FILE PHOTO: A trader walks next to Siemens Energy AG logos during Siemens Energy's initial public offering (IPO) at the Frankfurt Stock Exchange in Frankfurt, Germany, September 28, 2020.  REUTERS/Ralph Orlowski/File Photo

By Christoph Steitz

FRANKFURT (Reuters) - Siemens Energy on Thursday cut its outlook after wind division Siemens Gamesa warned of prolonged supply chain issues, renewing pressure on the German firm to fully take over the unit in order to get a better handle on its problems.

Siemens Energy, which owns 67% in Siemens Gamesa, said it now expects a margin on adjusted earnings before interest, tax and amortisation (EBITA) before special items in a range of 2% to 4% in 2022, down from 3% to 5% previously.

The announcement came shortly after Siemens Gamesa slashed its outlook for the third time in less than nine months, creating a headache for its German parent which has limited influence on the separately listed subsidiary.

"Performance was negatively impacted by supply chain related disruptions, which are now expected to last longer than previously anticipated, further affected by the continued impact of the COVID-19 pandemic," Siemens Gamesa said in a statement.

Siemens Gamesa's onshore division has been troubled for some time -- also caused by ramp-up issues around a new class of turbines -- but recent progress led Christian Bruch, the CEO of its parent, to be more hopeful.

The latest profit warning is expected to trigger fresh demands on Bruch to buy the remaining stake in Siemens Gamesa, worth around 4.3 billion euros ($4.9 billion) currently, or seek other ways to accelerate the turnaround.

Based on preliminary figures, Siemens Gamesa's loss before interest and tax before purchase price allocation and integration & restructuring costs came in at 309 million euros in the first quarter.

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This translated into an adjusted loss before interest, tax and amortisation before special items of 63 million euros for Siemens Energy, which also makes gas turbines, in the same period, compared with a 366 million profit last year.

($1 = 0.8846 euro)

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