Siemens Energy Gets Boost from Record Orders

November 16, 2022

©Siemens Energy
©Siemens Energy

Siemens Energy on Wednesday reported a record order backlog of nearly 100 billion euros ($104 billion), boosting its shares and overshadowing a widening net loss blamed on its struggling wind turbine division, Siemens Gamesa.

 Siemens Energy - which provides services and equipment to the power sector, such as gas and wind turbines - said its order backlog grew 4.3% to 97.4 billion euros at end-September, which marks the end of the company's fiscal year. 

Fourth-quarter sales also grew by 5.9% to 9.2 billion euros, beating the 8.8 billion Refinitiv estimate, driven by stronger demand for Siemens Energy's energy grid services and equipment. 

Calling the fiscal year of 2022 a "perfect storm", Chief Executive Christian Bruch said that the gas and power business delivered solid results while Siemens Gamesa was chiefly responsible for a wider annual net loss of 647 million euros.

The shares hit a 12-week high following the results to trade 6.8% higher at 1026 GMT, the biggest gainer among German blue-chips.

In 2023, Siemens Energy expects its net loss to narrow significantly and sales to grow 3%-7%, compared with a 2.5% decline in 2022. 

Siemens Energy expects to become profitable in 2024, to be followed by Siemens Gamesa a year later. 

Siemens Energy is banking on its 4.05 billion euro bid for the remaining third it does not already own in Siemens Gamesa to better integrate the division and fix quality issues at a next-generation turbine model. 

"The integration of Siemens Gamesa will help to improve profitability at our wind business and allow it to deliver to its full potential," Bruch said. 

He also hinted at possible changes to Siemens Energy's shareholder structure, where former parent Siemens AG holds a direct 35% stake, an overhang Bruch says is a source of concern among investors and is weighing on the group's stock. 

"It's logical that we would like to have another anchor shareholder," Bruch said, adding he was in regular talks with investors and that interest in the company was there. 

($1 = 0.9612 euros) 

(Reporting by Christoph Steitz and Alexander Huebner; Editing by Mark Potter and Elaine Hardcastle)



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