Siemens Gamesa doubles losses in first quarter to €884 million

By: News Team

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Siemens Gamesa doubles losses in first quarter to €884 million

Siemens Gamesa lost 884 million euros in the first quarter of its fiscal year 2023 (October to December), doubling the 403 million it had lost in the same period of 2022, affected by the failures detected in the monitoring of its installed fleet of wind turbines.

The wind turbine manufacturer has informed the National Securities Market Commission (CNMV) on Thursday that it also suffered the impact of a high level of costs, and that the result of the introduction of the new manufacturing capacity and the execution of expensive onshore projects also affected it.

Siemens Gamesa has explained, as it had already anticipated, that the result of the monitoring of its wind turbine fleet has shown a negative trend in the failure rates of certain components.

This has resulted in estimates of maintenance costs and provisions for guarantees higher than initially expected, and has estimated the negative impact at 472 million in the net operating result (EBIT pre PPA) and before integration and restructuring costs.

According to the wind turbine manufacturer, this cost increase mainly affected the Services division, and included a reduction in sales of 187 million euros; In addition, the company expects a cash impact during the fiscal year of 2023 for an amount of millions of euros in double digits.

Between October and December 2022, Siemens Gamesa’s sales increased by 9.8% compared to the same period of the previous year, to 2,008 million euros.

ORDER SIGNAGE FALLS BY 35%

During the first quarter of the year, Siemens Gamesa signed new orders worth €1,609 million, 35% less than in the same period of the previous year and the order book remained unchanged, at €33,698 million at the end of December 2022.

In the last twelve months, signed orders have amounted to 10,735 million euros.

According to Siemens Gamesa, the result of commercial activity in the first quarter of fiscal 2023 continues to reflect the prolongation of negotiations with customers on new contract terms, the impact of inflation on investment costs and higher financing costs, and the geopolitical environment.

Even so, he points out that, in terms of the supply chain, the new orders signed by the company have a protection against inflation, the volatility of product costs and logistics disruptions much higher than those signed in the past.

In addition, he highlighted that during the first quarter of the fiscal year the Siemens Gamesa 5.X platform reached increasing manufacturing and installation volumes and improved delivery times.

EBIT pre-PPA -purchase price allocation process- and before integration and restructuring costs showed a negative result of 760 million euros, with an EBIT margin of -37.8%.

As of December 31, 2022, Siemens Gamesa’s net financial debt stood at €1,925 million.

The company has €4,422 million in authorised financing lines, of which €2,296 million have been disposed, as well as total available liquidity of €3,322 million, including the cash position on the balance sheet at the end of the first quarter of 2023, which is €1,197 million.

Despite the quarterly financial economic performance, Siemens Gamesa said that the Mistral program, a roadmap it launched in May and which, in its initial phase, aims to consolidate the business, has continued to make progress in stabilizing operations.

The wind turbine manufacturer has said that, during the first quarter of 2023, it made progress in quality, technological development, manufacturing volume, installation and lead time of the projects of the Siemens Gamesa 5.X onshore platform, a model that accounted for 74% of the orders in megawatts of the quarter.

UGT-FICA and CCOO of Industry reached an agreement last December in order to negotiate the Employment Regulation File (ERE) with the management of Siemens Gamesa from January 10 for the departure of up to 352 people in Spain -which could be reduced-, of which 45% will be in 2023, and the rest, in 2024.

The number of Siemens Gamesa employees worldwide, which last year launched a reorganization process that would affect 2,900 jobs, increased by 6% compared to the first fiscal quarter of fiscal 2022 and stood at 28,151.

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