Due to unexpectedly high costs in connection with quality problems, Siemens Energy has now withdrawn its earnings forecast for the full year. Gas Services, Grid Technologies and Transformation of Industry revenue guidance and assumptions are maintained.
In its announcement, Siemens Energy refers to a technical review of the installed fleet and the product design. The current status suggests that achieving the desired product quality for certain onshore platforms will incur significantly higher costs than previously assumed. Possible quality-related measures and the associated costs are currently still being evaluated and are expected to be over 1 billion euros.
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In addition, Siemens Energy reviews the key assumptions underlying the business plans. In addition, there are still difficulties in ramping up production capacities in the offshore sector. Therefore, the group felt compelled to withdraw the profit forecast for Siemens Gamesa and thus also for Siemens Energy.
The group intends to provide details and specific figures in the context of reporting on the third quarter of the financial year.
When the second-quarter figures were published in mid-May, Siemens Energy still forecast a profit margin adjusted for special effects at the lower end of the forecast range of 1 to 3 percent. After taxes, a loss should occur that exceeds the previous year’s level of 712 million euros by up to a low three-digit million amount. The growth forecast is 10 to 12 percent on a comparable basis.
Siemens Energy shares collapse in after-hours trading
Siemens Energy shares fell more than 14 percent to a good 20 euros in after-hours trading on Tradegate. The share slips to its lowest level since the end of March.
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Image source: Siemens Energy AG