Siemens Gamesa ends 9-mo with EUR 1.2bn loss

Source: Siemens Gamesa Renewable Energy SA (www.siemensgamesa.com)

August 2 (Renewables Now) - Wind turbine maker Siemens Gamesa Renewable Energy SA (BME:SGRE) closed the first nine months of its 2021/2022 fiscal year with a net loss totalling EUR 1.226 billion (USD 1.253bn), after finishing the third quarter in the red.

In April through June, the company posted a net loss of EUR 446 million, as it continued to battle much of the same internal and external challenges that negatively impacted its financial performance over the previous quarters.

Costs inflation, non-availability of key turbine components, port congestion and supply delays took their toll on manufacturing, project execution and delivery, Siemens Gamesa said.

Internally, difficulties with launching the 5.X onshore turbine persisted, only to be joined by a headache over higher costs linked to component failures and repairs in legacy onshore platforms. The impact of these costs is estimated at around EUR 113 million, which affected the typically strong service division.

Key figures from Siemens Gamesa financial report are presented in the table:

In EUR million Q3 2022 Q3 2021 y/y change: 9-mo 2022 y/y change:
Revenues 2,436 2,704 -9.9% 6,442 -12.2%
-- turbines 1,904 2,179 -12.6% 4,967 -16.9%
-- services 532 525 1.2% 1,475 8.8%
EBIT (loss) pre-purchase price allocation (PPA) and integration and restructuring (I&R) costs (343) (151) -- (957) --
EBIT margin pre-PPA and I&R costs -14.1% -5.6% -8.5 p.p. -14.8% -16.0 p.p.
Reported EBIT (loss) (459) (238) 93.0% (1,221) --
Reported net income (loss) (446) (314) 41.9% (1,226) --

Turbine manufacturing activity was down by 25% year-on-year in the third quarter, mostly due to the onshore business. The offshore business slowed down the turbine installation activity, which was lower by 28% compared to the same quarter a year ago. The service division increased the capacity under under maintenance by 8% to 84 GW in the April-June quarter.

In its results presentation today, Siemens Gamesa said that it is preparing to reorganise company operations under the Mistral strategy programme it launched in May. In a nutshell, the company plans to bring all its manufacturing activities under the wing of the chief operating officer, and create the position of the chief technology officer to lead all product development.

Siemens Gamesa expects the reforms to result in a simpler and leaner organisation, and speed up the financial turnaround. The new operating model will go into effect on January 1, 2023.

Finally, Siemens Gamesa was able to set its targets for the full fiscal year after a period of reviewing its previously announced guidance. It still expects to record a revenue decline of between 9% and 2%, as calculated following the first quarter results. The targeted EBIT margin pre-PPA and I&R costs was adjusted to -5.5%, compared the previously set range of -4% and +1%.

(EUR 1.0 = USD 1.023)

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Sladjana has significant experience as a Spain-focused business news reporter and is now diving deeper into the global renewable energy industry. She is the person to seek if you need information about Latin American renewables and the Spanish market.

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