“Biggest slump since Wirecard”
Siemens Energy plummeted after profit warning
06/23/2023 10:03 am
Due to massive quality problems at the Spanish subsidiary, Siemens Energy expects a higher loss than already. This means a slump for the stock. Experts also blame inexperienced small investors for the fall in prices.
After the profit warning at Siemens Energy, investors throw their shares in the energy company onto the market almost in panic. Right at the start of trading, the papers come under the wheels with a discount of more than 35 percent. Competitors such as Nordex and Vestas were also unable to escape the pull – but then recovered. The wind turbine manufacturer subsidiary Siemens Gamesa is threatened with billions in special charges due to high failure rates of wind turbine parts. Siemens Energy had therefore withdrawn its profit forecast for the current fiscal year the previous evening. The Munich-based group had already expected a net loss of more than 800 million euros for 2022/23 (end of September).
“This is likely to be the biggest drop in a DAX value since Wirecard,” said a trader. Part of the fall may be due to stops by inexperienced investors who bought wind stocks for sentimental or environmental reasons, he says. ESG funds were also overweight here. The fundamental burden is that there is no end to the Gamesa problems in sight. These funds focus on environmental and social issues, among other things. “But something could support the course of the day that some analysts are holding the company,” said the trader. Despite everything, Goldman Sachs and JP Morgan reiterated their buy recommendations.
The problems at the wind turbine subsidiary Siemens Gamesa are more serious than expected for Siemens Energy. “The setback is more severe than I would have thought possible,” said Siemens Energy boss Christian Bruch in an analyst call. Too much had been swept under the rug. The effects of the technical problems with certain components cannot yet be fully assessed, since the life cycle of such parts lasts around 20 years, added Siemens Gamesa boss Jochen Eickholt.
Quality problems with wind turbines already installed on land would cause costs of probably more than one billion euros over the next few years, it said. In addition, the build-up of manufacturing capacity for better-performing offshore wind power is progressing more slowly than planned, and efficiency programs are yielding less than hoped. The problems were said to have been discovered during an investigation of the turbine inventory by a new team from Siemens Energy.