Siemens Gamesa's revenue and earnings take steep dive

The OEM lost EUR 466 million in profit and booked an 8-percent decline in revenue for its fiscal year's third quarter, during which Siemens Gamesa was strained by the Covid-19 pandemic and burdened on two of the group's onshore wind markets.

Photo: Siemens Gamesa

Wind turbine manufacturer Siemens Gamesa exited its fiscal year's third quarter (April-June) with a net deficit of EUR 466 million and an 8-percent fall in revenue landing at EUR 2.4 billion, shows the OEM's freshly published interim report, strongly impacted by the Covid-19 pandemic and challenging issues tied to its onshore wind business in India, Mexico and Northern Europe.

Earnings before interest and taxes come to EUR -161 million, equating to an EBIT margin of 6.7 percent.

EUR 93 million of this negative operating result can be directly attributed to the pandemic, Siemens Gamesa writes in a press release on its quarterly financial statement.

"We are navigating a complicated period, as an industry and as a company, and the numbers we have presented today reflect that," writes Chief Executive Andreas Nauen, who recently took over from the OEM's dismissed CEO, Markus Tacke.

"Nevertheless, we are already taking measures to turn the Onshore business around and return to profitability. The long-term outlook for our business is promising and our company has the technology and people needed to play a major role in developing a recovery underpinned by clean energies that help combat the effects of climate change," Nauen adds.

Siemens Gamesa characterizes its troubles as short-term, and the manufacturer also highlights a record-large order book worth EUR 31.5 billion, up 25 percent since the same period last year. The OEM discloses that offshore wind turbine supply and service contracts comprise 78 percent of the order book.

Debt and liquidity

The company's reduced its debt over the last 12 months by EUR 101 million to the present level of EUR 90 million. At the same time, Siemens Gamesa currently holds EUR 4 billion in consolidated liquidity, only EUR 1.2 billion of which "have been drawn", the group notes.

In April, the OEM withdrew its guidance for the full fiscal year 2020, ending in September, due to uncertainty resulting from the coronavirus.

However, some clarity has now emerged, and Siemens Gamesa now forecasts FY'20 revenue of EUR 9.5-10 billion and an EBIT margin between -3 and -1 percent. This corresponds to a revenue decline of EUR 1 billion and EUR 200-250 million in reduced earnings relative to the prior outlook.

Fired CEO and new flagship

Last month's sacking of Nauen's predecessor, Tacke, took place after an eventful and seriously challenging 2020 for Siemens Gamesa.

Despite its still-growing order catalog, the group's deficit has also deepened due to factors such as persisting problems in India, where the corona lockdown has only added to the country's problems in achieving its stated capacity build-out target. The turbine maker also had substantial problems in Norway.

Six months into its staggered fiscal year, the OEM registers a deficit of EUR 340 million. Taking currency fluctuations and other financial instruments into the account, the deficit totaled to EUR 581 million at the presentation of the FYQ2 interim report in early May.

On the other hand, the company also had a few positive things to announce for its product range. Siemens Gamesa revealed its new flagship offshore wind turbine with an effect of 14-15 MW. This news was followed with reports of conditional orders for around 3 GW within a matter of days.

The announcement of the largest of these contracts, roughly 2.6 GW for Dominion Energy's large offshore wind project in off the coast of Virginia in the US, came at the same time as Siemens Energy unveiled its impending stock listing.

English Edit: Daniel Frank Christensen

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