Record loss of 4.6 billion
Wind power problems drag Siemens Energy down
November 15, 2023, 7:50 a.m
Siemens Energy is also expecting problems in the wind power business next year. Sales should still bring the group a profit in the new financial year. For now, however, the biggest loss in the company’s history is in the books.
The day after the federal government’s guarantee, Siemens Energy announced a record loss. Almost 4.6 billion euros in the past financial year are by far the largest loss in the young history of the energy technology group. The cause is the problems in the wind power business, which regularly wreak havoc on Energy’s balance sheet and which reached a peak in the last financial year.
Although they continue to press, the Munich-based company expects a profit of one billion euros in the 2024 financial year, which has been running since October, thanks to sales. The operating profit margin is expected to be minus two to plus one (2023/23: minus 8.9) percent, with sales growth of three to seven percent. For the wind power subsidiary Siemens Gamesa alone, the group expects a loss of two billion euros in 2023/24; the break-even point is only realistic in three years – i.e. 2026. “In order to achieve the turnaround and make Siemens Gamesa profitable again, the scope of Siemens Gamesa’s business activities is currently being reviewed,” the statement said. Siemens Energy plans to announce more in the coming week.
The remaining businesses, on the other hand, are running solidly, but cannot compensate for the losses in the wind sector. “In an extremely challenging year for Siemens Energy, two thirds of our businesses are growing profitably and have met or exceeded their annual targets,” emphasized CEO Christian Bruch. Things are different in the wind business. “All efforts here are focused on reducing costs, selecting contracts and increasing productivity, while we work in parallel to resolve the problems.”
Demand for Siemens Energy products remains high. In the past financial year, incoming orders were a good 50 billion euros, around a third higher than in 2022. The order backlog grew by a good seventh to 112 billion.
“Significantly accelerated growth”
“The current high demand for our products also brings with it challenges,” said Bruch. “We are therefore pleased that, after very constructive discussions, we have found a good solution with everyone involved to ensure our growth, which has been greatly accelerated by the energy transition.”
On Tuesday, the Federal Ministry of Economics reported a breakthrough in the struggle for guarantees for Siemens Energy. The core is a federal government guarantee of 7.5 billion euros. The former parent company Siemens, private banks and other players are also on board. In total there are guarantees of 15 billion euros. In addition, Siemens Energy will sell 18 percent of the Indian company Siemens Limited to Siemens. So far, Energy still holds 24 percent of it as a result of its spin-off from the Siemens Group in 2020. The proceeds are said to be 2.1 billion euros.