Siemens Energy Shares Tumble 31% as Wind Turbine Troubles Exposed

A billion euros worth of trouble – they wouldn’t want that to be renewable. All is not well in wind turbine land.
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Siemens Energy saw $6.3 billion wiped off its market capitalization on Friday after warning that the impact of quality problems at its Siemens Gamesa wind turbine business would be felt for years, says OE Digital.

The group scrapped its 2023 profit outlook late on Thursday after a review of its wind turbine division exposed deeper-than-expected problems that could cost more than 1 billion euros.

“This is a disappointing and severe setback,” Siemens Gamesa CEO Jochen Eickholt told journalists on a call.

“I have said several times that there is actually nothing visible at Siemens Gamesa that I have not seen elsewhere. But I have to tell you that I would not say that again today.”

Siemens Energy’s share price plunge on Friday was the biggest since the group, which supplies equipment and services to the power sector, was spun off from Siemens and separately listed in 2020.

Shares were down 31.5%, with traders and analysts pointing out that the extent of the company’s latest problems was still uncertain.
“Even though it should be clear to everyone, I would like to emphasise again how bitter this is for all of us,” Siemens Energy CEO Christian Bruch told journalists in a call.

Finance chief Maria Ferraro earlier told analysts that the majority of the hit would be over the next five years.

“Given the history and nature of the wind industry, the profit warning was not a complete surprise, but what surprised us was the magnitude,” analysts at JPMorgan said.

Issues at Siemens Gamesa have been a drag on the parent for a long time, prompting Siemens Energy to take full control of the business after only partially owning it for several years.

The discovery of faulty components at Siemens Gamesa in January had already caused a charge of nearly half a billion euros.

Full article here.