Siemens Gamesa posts EUR-780m loss in H1, action plan under way

Image: Courtesy of Siemens Gamesa Renewable Energy

May 5 (Renewables Now) - Wind turbine maker Siemens Gamesa Renewable Energy SA (BME:SGRE) on Thursday reported a net loss of EUR 377 million (USD 399.6m) in its second quarter through March 2022, lower revenues, negative margins and no firm outlook for the year yet, as it continued to struggle with in-house challenges and supply chain chaos.

EBIT pre-purchase price allocation (PPA) and integration and restructuring (I&R) costs came at a negative EUR 304 million, carrying a margin of -14.0%, on costs to launch the Siemens Gamesa 5.X turbine platform, inflation, disordered logistics and lower turbine revenues. The group’s revenues for the quarter were down 6.8% year-on-year to EUR 2.18 billion, with the turbine service division being the only Siemens Gamesa segment to record any growth.

The net loss for the first six months expanded to a whopping EUR 780 million, compared to a EUR-54-million loss recorded in the same period a year back.

Haunted by the underwhelming performance, Siemens Gamesa said it has launched an action plan to deal with immediate issues and a programme it named Mistral aimed a achieving better results in the long and medium term.

“Since I joined the company as CEO on March 1, we have been working hard to identify the root causes of our underperformance. We are already implementing actions to address the short-term issues and stabilize the company in the shortest possible time, and we are already working on a plan to deliver our full potential. I remain confident of the company's long-term vision and our essential role in tackling the climate emergency and assuring energy independence,” said CEO Jochen Eickholt.

Siemens Gamesa’s results for the first quarter and the half-year period are summarised in the table below:

in EUR million unless otherwise noted: Q2 2022 Q2 2021 y/y change H1 2022 H1 2021 y/y change
Revenues 2,177 2,336 -6.8% 4,006 4,631 -13.5%
-- turbines 1,662 1,902 -12.6% 3,062 3,801 -19.4%
-- services 515 434 18.5% 944 830 13.7%
EBIT (loss) pre-PPA and before I&R costs (304) 111 -- (614) 232 --
EBIT margin pre-PPA and before I&R costs -14.0% 4.8% -18.7 p.p. -15.3% 5.0% -20.3 p.p.
Reported EBIT (loss) (385) (19) -- (762) (5) --
Attributable net income (loss) (377) (66) -- (780) (54) --

In the second quarter, the company manufactured 2,008 MWe of turbine units, down by 24% year-on-year, as a result of high costs of goods and services, shortages of materials and delays in component deliveries. Lower production levels impacted both the onshore and offshore turbine segment.

Firm order intake dropped by 78% year-on-year to roughly EUR 1.2 billion in the January through March quarter.

Outlook for the rest of the fiscal year is still under review. Siemens Gamesa said that it will work to achieve the results it initially guided for -- reined in revenue and margin decline -- but reiterated that it could not confidently assess the full impact of the ongoing internal and external challenges.

(EUR 1.0 = USD 1.060)

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Sladjana has significant experience as a Spain-focused business news reporter and is now diving deeper into the global renewable energy industry. She is the person to seek if you need information about Latin American renewables and the Spanish market.

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