Wind turbine maker Siemens Gamesa said on Friday it expects to return to profitability in 2022 after blaming its second annual operating loss in a row on higher raw materials and logistics costs, and cost overruns linked to a new model.
High demand for renewable energy generation equipment to help the world's economies shift away from carbon has not been enough to shield turbine makers' profits from surging prices for vital components such as steel, and jammed global supply chains.
Siemens Gamesa said it now expected its margin on earnings before interest and tax (EBIT) to be 1-4% in 2022, after -0.9% in 2021. In 2020, this metric hit -2.5%.
It also pushed out the horizon by which it expects to hit its long-term margin target of 8-10% to 2024 or 2025, having previously aimed to reach that level by 2023.
Formed in 2017 by a merger between Spain's Gamesa and the wind business of Siemens AG, Siemens Gamesa's main shareholder is now Siemens Energy, which was spun off from the German conglomerate last year.
Siemens Energy has expressed annoyance with stubborn issues at the onshore unit, where the rollout of a new turbine has proved more expensive and taken longer than expected.
Siemens Gamesa has lost more than 40% of its market value since renewable energy stocks started coming off heady highs in January.
It has fallen harder than market leader Vestas, which is nursing a 27% dent after cutting its own profit margin outlook twice this year.
(Reporting by Isla Binnie, Editing by Louise Heavens)