Lower pricing weighs on Siemens Gamesa's fiscal Q3

Siemens Gamesa Renewable Energy SA (BME:SGRE) today reported a net profit of EUR 44 million (USD 51.2m) and a 21% fall in revenues in its third fiscal quarter till the end of June.

Third-quarter revenues at the Spain-based wind turbine maker declined to EUR 2.14 billion, reflecting a decline in prices and a lower level of installations in the onshore segment. In addition, revenues were impacted by lower volumes in the offshore segment after strong offshore activity in the year-ago period.

The company said that the onshore business remains under pressure as it moves to fully competitive markets. The shift is expected to be favourable in the long term, but in the short term it is leading to double-digit price adjustments, according to its activity report. Turbine prices were the main drag on the EBIT (earnings before interest and tax) margin in the quarter, although the reduction was mitigated by strong performance by the Service division and productivity improvement, Siemens Gamesa said.

On the positive side, onshore sales volume returned to year-on-year growth in the quarter, recording a 14% increase to 1,703 MWe.

The following table contains more information about Siemens Gamesa's results in the three- and nine-month periods.

The company said its net profit continued to recover, reaching EUR 45 million in the first nine months of the fiscal year, including the impact of restructuring and integration costs. It also said that the financial performance so far in the fiscal year is in line with its annual guidance of EUR 9 billion-9.6 billion in revenues and EBIT margin of 7-8%.

The turbine maker boasted a record order backlog of EUR 23.23 billion, exceeding the previous peak in March 2017. The backlog was lifted by EUR 3.29 billion in firm orders, driven by the order for Ørsted's (CPH:ORSTED) Hornsea Project Two offshore wind farm in British waters.

Onshore wind order intake during the quarter was 1,660 MW, led by Brazil, Spain, South Africa, Ireland and the US. This was down from 2,464 MW in the preceding quarter, due to a shift of large orders towards the fourth quarter and a slowdown in the Asia-Pacific region, which the company expects to rebound in the next few quarters.

Siemens Gamesa anticipates stronger performance in its fourth fiscal quarter on the back of higher volumes, cost optimisation and synergies under its L3AD2020 transformation programme.

(EUR 1 = USD 1.163)

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