Siemens Gamesa swings to a loss but doubles offshore order intake

by James Bernthal-Hooker in Corporate 04/02/2020 Siemens Gamesa Renewable Energy


Siemens Gamesa Renewable Energy (Siemens Gamesa) has reported its financial results for the first quarter of the fiscal year 2020. The Spanish-headquartered turbine supplier swung to a loss in Q1 FY 2020, lowering its full-year guidance accordingly. However, commercial performance was extremely strong.


Revenue fell from € 2.6 billion last year to €2 billion, and the company reported a quarterly loss of €174 in the quarter, as opposed to the previous year’s €18 million profit in the same period.


The company’s unforeseen costs have been attributed to five onshore projects in north Europe, where adverse weather and road conditions hit Siemens Gamesa to the tune of €150 million.


This was not an easy quarter for Siemens Gamesa,” said Siemens Gamesa’s CEO, Markus Tacke. “The company's financial performance fell short of the expectations we had when we set our targets for the year. However, this was a one-off impact and we do not expect it to recur in future quarters as we are taking the necessary measures as we are taking the necessary measures. We have stepped up risk analysis to ensure project execution is on track and we will also strengthen our internal control system to avoid a recurrence.


“The results also underlined the long-term opportunities for wind energy and Siemens Gamesa. We are in an industry with huge potential and we are taking advantage of this with intense commercial activity that resulted in a record order book.”


Offshore commercial activity increased significantly, with the company’s order doubling to over 2.2 GW, of which 1.3 GW were signed in the first quarter. Siemens Gamesa’s pipeline now totals 9.6 GW. The company also reported strong onshore commercial activity, with orders up 8.1%, and “an extraordinary level of commercial activity” in service. The company has credited the change in global conversation towards renewable energy with its strong commercial intake. Sales stood at €2,0001 million, while the company has reported a net cash position of €175 million.


Siemens Gamesa has reported that it is “focused on retaining a sound balance sheet” and it “has introduced sustainability criteria throughout its funding chain.” It will report more fully its strategy for coming years on its Capital Markets Day, on 6th May 2020.


Q1 FY 2020 key results are outlined below:


Revenue
: €2,001 million (Q1 FY 2019 result €2,262 million)

EBIT before PPA and integration and restructuring costs:
 -€136 million (Q1 FY 2019 €138)

Reported EBIT:
-€229 million (Q1 FY 2019 €40 million)

EBIT margin before PPA and integration and restructuring costs:
-6.8% (Q1 FY 2019 6.1%)

Reported net profit:
-€174 million (Q1 FY 2019 €18 million).


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