Siemens Gamesa has shot up its losses to 780 million euros in the first half of its fiscal year 2022 (which started in October 2021), compared to the red numbers of 54 million in the same period last year. The wind generator manufacturer points out that it has been impacted by economic volatility and problems in the launch of its 5.X platform. With the presentation of results, the company has announced a new long-term plan to “develop its full potential”.
The group highlights that production and profitability have been affected by greater pressure from energy costs, raw materials and logistics; due to the unavailability of key components of the wind turbines; due to port congestion; and due to delays in investment decisions by its clients that condition commercial activity in the onshore wind energy market.
Sales for the first half of Siemens Gamesa amounted to 4,006 million euros, 13% below those of the same period of the previous year. The turnover of the wind turbine segment fell by 19%, to 3,062 million, while sales of services, with an amount of 944 million, rose by 14%. As of March 31, the net financial debt amounted to 1,731 million. The company has 4,387 million euros in authorized financing lines, of which 1,908 million euros have been drawn down. In addition, it has a total liquidity of 3,538 million euros, taking into account the cash position on the balance sheet at the end of the second quarter (1,058 million euros).
The wind turbine manufacturer, which last March took over from its leadership with the appointment of Jochen Eickholt as CEO, has announced the implementation of actions to “urgently” address short-term priorities. The program, called Mistral, will focus on identifying the key levers to expand margins in the medium term and will explore transformation measures to unleash the full potential of Siemens Gamesa in the long term.
In the presentation, Eickholt highlighted that the results of the second quarter “reflect the internal and external challenges” facing the firm. “Since I joined Siemens Gamesa as CEO on March 1, we have focused on identifying the main causes of our poor performance. We are implementing measures to resolve short-term problems and stabilize the company in the shortest time possible, and we are also working on a plan that will allow us to develop the full potential of the company”, he assured.
Review of objectives
He knows in depth all the sides of the coin.
Siemens Gamesa signed orders during its second quarter (January, February and March) worth 1,198 million, a result that has to do with a longer duration of commercial negotiations in the onshore wind energy sector, the current inflationary environment and the volatility of commercial activity in offshore wind power. At the end of March, the group’s order book amounted to 32,831 million, which in the company’s opinion reflects the expected growth of the sector.
Anticipating the poor results, the group already communicated to the market a few weeks ago that, in the current context, it was not possible to assess the impact of internal and external challenges with the necessary degree of certainty. For this reason, it announced that the forecasts of its performance in fiscal year 2022 were no longer valid and were subject to revision. The objective that was set was to achieve sales growth to place them between 9% and 2% below the turnover for the 2021 financial year. The profit objective was located in the lower part of the range that had been previously given.