2023-08-07 11:22:12
Siemens Energy AG has launched a strategic review of its wind power business, as problems with its turbines are expected to cause a net loss of €4.5 billion ($5 billion) in one of Germany’s industrial calamities.
Shares fell 5.1% following the company disclosed that it expects to incur a loss that comes following the German manufacturer’s repeated failures to get quality issues under control.
The company previously forecast a net loss of €1 billion in the year to September. “It was a very tough quarter,” CEO Christian Broch said in an interview with Bloomberg Television.
He added that the company is currently reviewing various elements of its wind business, as the problems are “delaying our path to profitability” in the division.
The update marks the first day by Siemens Energy following it scrapped its annual profit forecast in June. Its shares fell at a record rate at the time, following the company said that technical problems in the land turbines of its subsidiary in Spain, Siemens Gamesa, might cost more than one billion euros to solve.
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Shares remain 30% lower than they were before today’s statement, and the decline came following a number of failures to fix turbine problems.
Siemens Energy said on Monday that it expects repair costs of €1.6 billion to remedy the defects in Gamesa’s onshore turbines.
Quality issues can occur in “certain rotary blades and main bearings on the 4X and 5X platforms,” according to a statement.
A limited number of onshore turbines have been affected, which can still be commissioned. The main part of the repair costs is expected to be paid over the next two financial years.
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