The DAX-listed company no longer expects to be able to reduce its loss in the current fiscal year. The company announced on Thursday evening that this was due to unexpectedly high warranty and maintenance costs at Siemens Gamesa. In the course of the evaluation, Siemens Gamesa identified a "negative development in the failure rates of certain components". "The problems at Gamesa do not stop and are weighing operationally on the group and its profitability," said a trader.

On balance, Siemens Energy expects a loss for the current financial year at the previous year's level. In 2022, the loss amounted to 647 million euros. The profit margin before special items is now expected to be in the range of one to three percent in the fiscal year to the end of September, whereas the Group had previously assumed two to four percent. Comparable sales growth - i.e. excluding exchange rate and portfolio effects - is still expected to be between three and seven percent. Siemens Energy shares fell by up to 3.4 percent, making them one of the weakest stocks on the DAX.

In the first quarter alone, Siemens Energy posted a loss of 384 million euros - analysts surveyed by the company had only expected a loss of 32 million euros. Siemens Gamesa posted a loss before special effects of 760 million euros. In contrast, the results of the other divisions exceeded analysts' forecasts. At a good seven billion euros, sales at Siemens Energy were also higher than experts had expected.

PROBLEMS ALSO AFFECT OFFSHORE PLANTS

Siemens Gamesa CEO Jochen Eickholt said at an analyst conference that the problems had occurred in a "broad mix of components affecting a large number of platforms". Both onshore and offshore turbines were affected. Most recently, quality problems with onshore turbines in particular had caused the company problems. CFO Beatriz Puente said that the difficulties that have now arisen are likely to have a negative impact on cash flow for up to eight years. At the same time, however, Eickholt expressed confidence that fewer problems would arise during quality inspections in the future.

Eickholt is regarded as a proven restructurer and has been at the helm of the long-struggling wind power subsidiary since last year. He had launched a strategy program called "Mistral" - named after a cold north-westerly wind in France - which is intended to return Siemens Gamesa to profitability in the long term with simpler and leaner structures. It is also planned to cut thousands of jobs. Siemens Energy currently holds 92.72 percent of the Spanish company and intends to delist it from the stock exchange. This step should ensure less friction in the future. Siemens Energy also hopes to achieve annual savings of around 300 million euros. The shareholders are to vote on the move on January 25.

(Report by Christina Amann and Christoph Steitz, with the assistance of Birgit Mittwollen, edited by Myria Mildenberger. If you have any questions, please contact our editorial team at Berlin.Newsroom@thomsonreuters.com (for politics and the economy) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets)