Record minus at Siemens Energy
The day after receiving a guarantee from the German government, Siemens Energy announced a record loss. Just under 4.6 billion euros in the past fiscal year is by far the largest loss in the young history of the energy technology group. The reason for this is the problems in the wind power business, which have regularly caused Energy's balance sheet to suffer and reached a peak in the last financial year. Although they continue to weigh on the company, the Munich-based company expects to make a profit of one billion euros in the 2024 financial year, which has been running since October, thanks to sales.
However, the wind power business will also accumulate losses in 2024: Before special effects, the Group expects a minus of around two billion euros there. By contrast, the remaining businesses are running solidly, but will not be able to compensate for the losses in the wind sector.
"In an extremely challenging year for Siemens Energy, two thirds of our businesses are growing profitably and have achieved or exceeded their annual targets," emphasized CEO Christian Bruch. The situation is different in the wind business. "Here, all efforts are focused on reducing costs, selectivity in contracts and increasing productivity, while we work in parallel to resolve the problems."
Demand for Siemens Energy products remains high. In the past fiscal year, order intake was a good 50 billion euros, around a third higher than in 2022. The order backlog grew by a good seventh to 112 billion euros.
"Strongly accelerated growth"
"The current high demand for our products also brings challenges," said Bruch. "We are therefore pleased that, after very constructive discussions, we have found a good solution with all parties involved to ensure our growth, which has been greatly accelerated by the energy transition."
On Tuesday, the Federal Ministry of Economics announced a breakthrough in the struggle for guarantees for Siemens Energy. The core of the deal is a guarantee from the federal government for 7.5 billion euros. The former parent company Siemens, private banks and other players are also on board. In total, the guarantees amount to 15 billion euros. In addition, Siemens Energy will sell 18 percent of the Indian company Siemens Limited to Siemens. As a result of its spin-off from the Siemens Group in 2020, Energy still holds a 24 percent stake. The proceeds are expected to amount to 2.1 billion euros.
- The federal government provided a guarantee of 7.5 billion euros to support Siemens Energy's growth, which has been significantly accelerated by the energy transition.
- Despite facing challenges in the Electric industry, particularly in wind power, Siemens Energy has managed to secure orders worth a good 50 billion euros in the past fiscal year, with a record order backlog of 112 billion euros.
- To mitigate losses in the wind power business, Siemens Energy is focusing on reducing costs, being selective in contracts, and increasing productivity, while simultaneously working to resolve the underlying issues.
Source: www.dpa.com
