Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Siemens Energy, the German clean energy company, reported a full-year net loss of €4.6bn on Wednesday, hours after agreeing a government-led rescue plan.
The group said it was restructuring its wind turbine business, Siemens Gamesa, after confirming steep losses which it described as an “unexpected, serious setback”. The company had issued a profit warning in June.
Siemens Energy said it did not expect its wind business to return to profitability until 2026, weighing heavily on group earnings even as its other divisions were expected to continue growing strongly.
Overall, the company expects to return to profitability next year. Shares in the DAX-listed company, which was spun out of Siemens in 2020, have slid more than 40 per cent so far this year. Siemens still holds a 25 per cent stake.
“In a year of unprecedented challenges, Siemens Energy showed that turnarounds are achievable, with the businesses, excluding wind, meeting or exceeding their full-year targets,” said chief executive Christian Bruch.
“We are seeing progress in dealing with the issues at Siemens Gamesa, and I am encouraged that the data from the installed onshore turbines confirm our previous findings. Our strong balance sheet remains a top priority, and Siemens Energy’s vital role in the energy transition will continue to drive our growth and success in the years ahead.”
Problems at Siemens Gamesa have been “ringfenced”, the company added. The division has been plagued with technical problems in some of its core products and hit hard by inflation, which has eroded its margins thanks to locked-in sale prices.
The German government confirmed on Tuesday it was providing €7.5bn in credit guarantees to Siemens Energy as part of a €15bn rescue package, with €12bn lent by banks, to try and shore up its order book.
Due to the difficulties at Siemens Gamesa and broader problems in the renewables financing market, the company warned on October 26 that without billions of euros in additional lending and credit guarantees, it would struggle to fulfil a huge order backlog of more than €110bn.
The company will suspend its dividend for the duration of the government support, as well as bonuses for its board of directors.
The bailout deal will also involve Siemens Energy selling a stake in its Indian joint venture with Siemens, at a 15 per cent discount, raising €2.1bn.
Credit: Source link
