Siemens Gamesa Renewable Energy SA (BME:SGRE) said on Thursday it had booked a net loss of EUR 884 million in the first quarter through December 2022 on higher maintenance costs and warranty provisions due to unspecified components failure at the installed wind turbine fleet.
These costs wiped away EUR 472 million, spilling red all over the income statement from operating profit down to the bottom line and affecting mostly the performance of the services division.
The loss of EBIT before purchase price allocation (PPA) and integration and restructuring (I&R) costs ballooned compared to the first quarter a year earlier, margins were in the double digits negative territory, all leading to a more than double the net loss of EUR 403 million in the year-prior quarter.
The firm order intake fell by 35% year-on-year to EUR 1.61 billion, with reductions felt across all three divisions -- onshore, offshore and services.
More details on Siemens Gamesa’s Q1 financial results are presented below:
| in EUR million unless otherwise noted: |
Q1 2022/2023 |
Q1 2021/2022 |
y/y change: |
| Revenues |
2,008 |
1,829 |
9.8% |
| -- onshore |
751 |
941 |
-20.1% |
| -- offshore |
829 |
460 |
80.4% |
| -- services |
428 |
429 |
-0.2% |
| EBIT (loss) pre-PPA and before IR costs |
(760) |
(309) |
-- |
| EBIT margin pre-PPA and before IR costs |
-37.8% |
-16.9% |
-20.9 p.p. |
| -- turbine EBIT margin pre-PPA and before IR costs |
-28.5% |
-29.3% |
0.8 p.p. |
| -- service EBIT margin pre-PPA and before IR costs |
-72.4% |
23.5% |
-- |
| Reported EBIT |
(878) |
(377) |
-- |
| Attributable net income (loss) |
(884) |
(403) |
-- |
Nevertheless, the wind turbine maker still had some good news to report. First, its Siemens Gamesa 5.X onshore turbine platform, which has cost the company too much to launch, accounted for 74% of the orders in the first quarter. Siemens Gamesa said that it had achieved “progress in quality, technology development, manufacturing, installation volume and project delivery” for 5.X.
Some of the impact of supply chain disruptions and high inflation that also plagued Siemens Gamesa's peers last year will be softened thanks to provisions in the new contracts. The company said that the newly signed orders have “much greater protection against inflation, volatility in product costs and logistics disruptions that those signed in the past”.
Finally, Siemens Gamesa’s Mistral internal reorganisation strategy went into effect on January 1, and the company said that the programme made some advances. The hope is that the integration of onshore and offshore manufacturing and technology activities will lead to cost and quality improvements.
Siemens Gamesa is also preparing for the new regime to take over. Its parent company Siemens Energy AG (ETR:ENR) will finalise the purchase order of the turbine maker’s shares on February 7 and delist the shares from the Spanish stock exchanges.
Siemens Gamesa, whose shareholders recently approved the move, expects to be be delisted on or around February 10, it said.
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Siemens Gamesa offshore wind turbine being loaded onto cargo ship. Source: Dominion Energy Inc
