Siemens Gamesa Renewable Energy SA (BME:SGRE) arrived at a net loss of EUR 466 million (USD 547.3m) in the third quarter ended June 2020, compared with a EUR-21-million profit a year back, impacted by the COVID-19 pandemic and struggles in the onshore business.
The pandemic alone took EUR 93 million off quarterly profit, the turbine maker said Thursday.
The company's existing challenges with the execution of an onshore portfolio in Northern Europe and a slow-down in India were joined by new renewables-unfriendly government policies in Mexico. Onshore projects further suffered from disruptions in the supply chain due to the pandemic, which also forced the company to temporarily close its factories in India and Spain, according to the quarterly financial report.
As a consequence, revenues dropped by 8.4% year-on-year to EUR 2.41 billion.
More details are given in the table below:
| in EUR million (unless otherwise noted) |
Q3 2019/20 |
Q3 2018/19 |
| Revenues |
2,411 |
2,632 |
| --onshore |
1,143 |
1,229 |
| --offshore |
805 |
1,013 |
| --service |
464 |
390 |
| EBIT (loss) pre-purchase price allocation (PPA) and integration and restructuring (I&R) costs |
(161) |
159 |
| EBIT margin pre-PPA and I&R |
-6.7% |
6.1% |
| Reported EBIT (loss) |
(472) |
56 |
| Reported attributable net profit (loss) |
(466) |
21 |
The COVID-19 impact on the onshore business was such that Siemens Gamesa booked 1,200 MW in firm turbine orders in April through June, down by 44% year-on-year. The company's solid commercial performance rested on the offshore and services units, which boosted the total firm order intake by 14% to EUR 5.342 billion.
The offshore unit signed a record 2,860 MW worth of orders, up 87% year-on-year, surpassing the total order intake in the previous fiscal year.
Going forward, Siemens Gamesa guides for revenues between EUR 9.5 billion and EUR 10 billion for the fiscal year ending September 2020. EBIT margin before PPA and I&R costs is seen between -3% and -1%.
Siemens Gamesa said it is taking measures to regain profitability, including a “change of course in India to tailor the business to actual market demand”. The company will launch a programme, called LEAP, with which it will seek to revive the onshore business and ensure the growth of the offshore and services unit. Details on LEAP will be unveiled on Capital Markets Day scheduled for August 27.
(EUR 1.0 = USD 1.175)
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Source: Siemens Gamesa Renewable Energy SA (www.siemensgamesa.com)
