Nov 6, 2014 - German engineering major Siemens AG (ETR:SIE) said today its wind power division lost EUR 66 million (USD 82.6m) in the fiscal fourth quarter due to EUR 223 million in quality issue-related charges.
In comparison, the wind division booked a profit of EUR 179 million in the fourth quarter of its previous financial year, ended on September 30, 2013.
Siemens incurred the specific charges for replacing defective main bearings in onshore wind turbines as well as for repairing both offshore and onshore wind blades. Another reason for the quarterly loss was the significantly lower contribution from the division’s higher-margin offshore activities compared to the corresponding period of fiscal 2012/13. A EUR-48-million gain related to the fair value measurement for an equity investment was not enough to offset these factors.
Fourth-quarter revenue was flat at EUR 1.62 billion. Siemens noted that its wind segment enjoyed solid growth in the Americas, which helped offset declines in other regions. Orders increased 19% to EUR 1.81 billion thanks to large contracts in Europe, the Commonwealth of Independent States, Africa and the Middle East.
The charges at the wind division dragged down the performance of Siemens’ entire energy segment. It reported a fourth-quarter profit of EUR 403 million compared to EUR 564 million a year back. Revenue decreased 4% to EUR 7.14 billion.