“Disappointing” wind power weighs on Siemens Energy’s third quarter

FRANKFURT, Aug. 4 (Reuters) – Siemens Energy (ENR1n.DE) on Wednesday attributed a “disappointing” performance to the Siemens Gamesa (SGREN.MC) wind unit for a 37% drop in orders in the third quarter as well as a target lowered for its key profit margin.

The group, which supplies turbines and services to the utility industry, said that while its gas and power segment was fully on track, Siemens Gamesa, of which Siemens Energy owns 67%, was not.

“We are not satisfied with the performance of (Siemens Gamesa), which suffered a major setback in the turnaround of the onshore business,” said Christian Bruch, CEO of Siemens Energy.

Siemens Energy, in charts released with third quarter results ending June 30, said it was working closely with the Siemens Gamesa board regarding “remedial measures”, without being more specific.

Siemens Gamesa, the world’s largest manufacturer of offshore wind turbines, issued a profit warning last month and cited high commodity prices as well as problems with launching an onshore turbine as the main triggers. Read more

The Madrid-listed company was born in 2017 from the merger of the Spanish Gamesa and what was then the wind activity of Siemens AG (SIEGn.DE).

Siemens Energy, which as a result withdrew its margin outlook, said it now expects an adjusted margin on earnings before interest, taxes and depreciation in the range of 2% to less than 3% before special items.

“Siemens Gamesa remains a weak point instead of being the engine of growth,” said a Frankfurt-based trader.

This margin stands at 3.5% after nine months. Orders in the third quarter fell to 5.95 billion euros ($ 7.1 billion), while the group’s backlog fell 1.9% quarter-on-quarter to 82.6 billion.

($ 1 = 0.8425 euros)

Reporting by Christoph Steitz and Tom Kaeckenhoff, editing by Kirsti Knolle and Tomasz Janowski

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