Siemens Energy faces wind turbine headwinds as SGRE losses mount

By Energy Connects

May 11, 2022

SGRE reported a loss of 377 million euros for the quarter ending in March.

Siemens Energy on Wednesday warned of further headwinds to its revenue growth next quarter as losses mounted at Siemens Gamesa Renewable Energy (SGRE) and the parent company put on hold a divestment of the troubled wind turbine division of its renewable energy business.

SGRE reported a loss of 377 million euros for the quarter ending in March, taking its half yearly losses to 780 million euros and weighing heavily on Siemens Energy – which owns 67 percent of SGRE. The problems in SGRE mounted as its wind turbine division was severely hit by global supply chain disruptions and cost escalations.

Revenue in the first half at SGRE amounted to 4 billion euros, down 13 percent year on year, and hitting EBIT before integration and restructuring costs to go down by 614 million euros.

“Disappointing again is the performance of SGRE which is weighing heavily on Siemens Energy. The situation at SGRE has aggravated further since the last profit warning. As a majority shareholder, we provide our expertise to get to the bottom of the problems and to tackle the issues,” Christian Bruch, President and Chief Executive Officer of Siemens Energy, said in a statement.

Last month, SGRE, the world's largest maker of offshore wind turbines, flagged deeper than expected problems launching a new generation of onshore turbines as well as higher costs that led the company to review its 2022 outlook.

Bruch told journalists on Wednesday that Siemens Energy was not currently looking at divesting its wind turbine division at SGRE as part of a strategic review. “For me, this is not an option we are actively pursuing at the moment,” he said.

“Given SGRE’s adjusted aspiration for fiscal year 2022 and in light of prevailing challenges, management now expects for Siemens Energy for fiscal year 2022 results towards the low end of the guidance ranges for comparable revenue development (negative 2 percent to positive 3 percent) and adjusted EBITA margin before special items between 2 and 4 percent,” Siemens Energy said in a statement.