Siemens Gamesa struck by supply chain struggles
Siemens Gamesa Renewable
Energy (SGRE) has published it preliminary results for the first quarter
of 2022 (Q1 2022) and updated its guidance for the financial year of 2022.
SGRE's preliminary earnings for Q1 2022 saw revenue of €1.8 billion. EBIT
pre PPA and I&R costs were down by €309 million. It also reported
a net financial debt of -€1.1 billion with available facilities of €3.2
billion (out of which, €2.0 billion maturing in financial year 2027).
Order intake of €2.5 billion including the Offshore contract for the Gode
Wind farm in Germany. Total order backlog amounted to €33.6 billion at
the end of the quarter.
SGRE stated that in Q1 2022 performance was negatively impacted by supply
chain related disruptions, which are now expected to last longer than previously
anticipated, further affected by the continued impact of the COVID-19 pandemic.
SGRE outlined that these supply chain tensions have resulted in higher
than expected cost inflation, mainly affecting its Wind Turbine (WTG) segment.
Also, volatile market conditions have impacted some of its customers’
investment decisions and, as a consequence, resulted in delays to some
of our projects.
SGRE also revealed that it is facing ramp-up challenges for its Siemens
Gamesa 5.X platform, including some necessary design changes, which have
affected its production and project execution schedule. The negative impact
of these delays and changes in production plans has been exacerbated by
the existing bottlenecks in the supply chain.
The consideration of these higher costs and the update of the assumptions
for market and production conditions in the evaluation of the total WTG
Onshore order backlog, has led to a negative EBIT impact in the amount
of €289 million in Q1 2022, mainly due to cost estimate deviations in
onerous contracts.
Despite this, SGRE WTG Offshore contribution remained positive, and Service
delivered more than 20% profitability (EBIT pre PPA and I&R costs)
in the quarter, despite supply chain disruptions, and its negative impact
on its operations.
Based on the first quarter performance and the outlook for the remainder
of the year, SGRE is adjusting its guidance for financial year 2022. Group
comparable revenue growth in financial year 2022 versus financial year
2021 is expected to range between -9% and -2% (previously revenue decline
between -7% and - 2%).
Group EBIT margin pre PPA and I&R costs is expected to range between
-4.0% and +1.0% (previously between +1% and +4%). Despite the complex near-term
environment, SGRE maintains its long-term vision for the business aiming
for an EBIT margin pre PPA and I&R costs of +8% to +10%.