2023-06-22 20:01:00
Transport of a turbine part
Siemens Energy suffers from many problems, some of which are of its own making.
(Photo: imago images/Ritzau Scanpix)
Munich The Dax group Siemens Energy has received the forecast for the current year due to serious quality problems at its crisis subsidiary Gamesa. The problems with certain wind power platforms could cause costs of probably more than one billion euros, Siemens Energy warned on Thursday evening.
Siemens Gamesa has been dragging the entire group down for years with high losses and constant new negative surprises. Since the spin-off from Siemens, the young group has only made losses.
In order to be able to take better action, Siemens Energy first sent CEO Jochen Eickholt to Madrid as a reorganizer and then took over the company completely.
But improvement is not in sight, on the contrary. The installed fleet of wind turbines and the product design have now been checked due to clearly excessive failure rates for wind turbine components. According to the interim status, it must be assumed that “substantially higher costs will be incurred to achieve the desired product quality for certain onshore platforms than previously assumed.” The burden is expected to be more than one billion euros.
Siemens Energy boss Christian Bruch had already had to lower the yield forecast several times. Originally, the group wanted to significantly reduce the previous year’s loss of 647 million euros in the current 2022/23 financial year, which ends on September 30.
Siemens Energy does not want to make a new forecast
After a weak first quarter, Bruch now expected a net loss at the previous year’s level. In May, he then assumed that the loss “will exceed the level of the previous year by up to a low three-digit million amount”. Now this forecast is also waste.
Siemens Energy did not want to make a new forecast yet. An exact assessment of the possible financial consequences of the quality problems is not yet possible. The group emphasized that the other businesses, such as electricity grids and gas-fired power plants, continue to do well. The sales forecast for the entire group also continues to apply.
The problems at Siemens Gamesa have many causes. The entire industry is struggling with the fact that the increased costs for steel, for example, cannot be passed on to customers because the old contracts did not provide for this.
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There has also been a ruinous price war on the market for years, mainly triggered by the switch from fixed state remuneration to free tendering systems. Since then, only the cheapest provider has been awarded the contract.
Experts doubt Gamesa’s ability to restructure
The turbine manufacturer adds many home-grown problems. Only a few synergies were used between the onshore segment with the wind turbines on land and the offshore segment. In addition, the launch of the first jointly developed platform 5.X went poorly. There are also difficulties in ramping up production capacities in the onshore area, with which the high demand is to be met.
Some experts are now wondering whether Siemens Gamesa is even capable of restructuring. Bruch emphasized: “The success of the wind business remains the basic requirement for us to become a profitable market leader in the field of energy transition.”
According to industry circles, Bruch is very upset about the constant flow of bad news from Madrid. However, the full integration of the subsidiary after the complete takeover has not yet been completed. Only then would the headquarters in Munich have full control.
Almost two weeks ago, Gamesa’s remaining minority shareholders agreed to a capital reduction. As a result, the outside shares can be withdrawn – similar to a squeeze-out in Germany.
Siemens Gamesa was formed in 2016 from the merger of the Siemens wind power division with its listed competitor Gamesa. The Munich-based company was the world market leader for offshore wind turbines on the high seas, while the Spaniards focused on onshore wind turbines on land. However, the integration failed and synergies between the two parts were hardly used. Several changes at the top of the Siemens Gamesa board have not been successful so far.
More: Wind power industry in crisis – Siemens Energy expects increasing losses for the year as a whole
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