Siemens Gamesa Posts $974M Net Loss on Higher Warranty Costs
Christoph Steitz and Inti Landauro
February 2, 2023
Beleaguered wind turbine maker Siemens Gamesa, soon to be delisted and folded into parent Siemens Energy, said on Thursday its first-quarter net loss more than doubled on higher warranty provisions as a result of faulty components.
The net loss in the October-December period, Siemens Gamesa's fiscal first quarter, widened to 884 million euros ($974 million) from 403 million in the same period last year, the company said.
The company last month flagged increased failure rates of unspecified components of its installed onshore and offshore wind turbines, triggering higher warranty provisions that have also plagued Danish rival Vestas.
"The negative development in our service business underscores that we have much work ahead of us to stabilize our business and return to profitability," said Siemens Gamesa Chief Executive Jochen Eickholt, who joined from Siemens Energy last year.
Eickholt was brought on board to fix Siemens Gamesa's operational issues, including problems with the 5.X onshore turbine that has caused several profit warnings for the Spanish-listed group and its German parent.
Still, Siemens Gamesa confirmed the outlook for the wind industry remained good, pointing to the U.S. Inflation Reduction Act as well as the continent's RePowerEU program aimed at ditching fossil fuels.
"But further governmental action is needed to close the gap between ambitious targets and actual installations," said the company, whose shareholders last week approved plans for a delisting this month.
($1 = 0.9078 euros)
(Reporting by Inti Landauro and Christoph Steitz; Editing by David Latona, Rachel More and Miranda Murray)
