Siemens Energy Reviews Wind Turbine Business After Massive Loss

Siemens Energy is reviewing the scope of activities at its wind turbine-making unit, Siemens Gamesa, as quality issues, rising costs, and ramp-up challenges in the wind business dragged the company into a net loss of $5 billion for the 2023 fiscal year.  

Siemens Energy booked a net loss of $4.98 billion (4.59 billion euros) for the 2023 fiscal year as the good performance of the conventional business was overshadowed by the setbacks in the wind business.

“The wind business remains a major challenge and has led to the net loss in 2023. In the past financial year, Siemens Gamesa suffered an unexpected, serious setback,” Siemens Energy said on Wednesday.

“Charges for quality issues in the onshore business, increased product costs and ramp-up challenges in the offshore business severely impacted the results for the fiscal year 2023 and will continue to impact the Group's profitability in the near to mid-term. Break-even at Siemens Gamesa is now expected in fiscal year 2026,” the company added.

“Going forward, one has to absolutely ask the questions on what products are being offered in what markets,” Siemens Energy CEO Christian Bruch said, as quoted by Reuters.

In August, Siemens Energy initiated a review of its wind business after taking a large hit to earnings and expected full-year revenues and profits due to problems at Siemens Gamesa, one of the largest wind turbine makers in the world. At the end of June, Siemens Energy withdrew the profit guidance for the company due to problems with wind turbines at Siemens Gamesa.

On October 26, Siemens Energy shares plunged by more than 30% to an all-time low after the company said it is in preliminary talks with different stakeholders, including banking partners and the German government, to ensure access to guarantees for long-term projects.

The German government has agreed that it would counter-guarantee $7.6 billion (7.5 billion euros) of a total amount of $13 billion (12 billion euros) of guarantees, Siemens Energy said today.

By Tsvetana Paraskova for Oilprice.com

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