Order intake Siemens Gamesa shoots up 82%
Wind turbine manufacturer Siemens Gamesa saw its order intake shoot up by 82% in the last quarter, with the order book reaching more than EUR 28 billion in value. Despite the good long-term outlook, the company says it was “not an easy quarter” as the financial performance fell short of expectations.
Siemens Gamesa encountered unforeseen headwinds as adverse road conditions and the unusual early arrival of winter weather in Norway, presented the company with severe delays on five onshore projects in Northern Europe and unexpected extra costs of EUR 150 million.
The company’s fiscal year runs from Oktober to September so the fourth quarter of last year is actually the Siemens Gamesa’s first quarter of the fiscal year 2020.
In the past quarter, the company saw its revenue drop from EUR 2,262 million in the first quarter of last year to EUR 2,001 million now. The operational result (ebit) went from a profit of EUR 40 million to a loss EUR 229 million with net profit amounting to a loss of EUR 174 million.
“This was not an easy quarter for Siemens Gamesa”, comments CEO Markus Tacke. “The company’s financial performance fell short of the expectations we had when we set our targets for the year. However, this was a one-off impact and we do not expect it to recur in future quarters as we are taking the necessary measures. We have stepped up risk analysis to ensure project execution is on track and we will also strengthen our internal control system to avoid a recurrence.”
He added that the results underline the long-term opportunities for wind energy and Siemens Gamesa. “We are in an industry with huge potential and we are taking advantage of this with intense commercial activity that resulted in a record order book. Moreover, the acquisition of strategic assets from Senvion will boost our service business, where margins are higher”, Tacke said.
Despite the financial headwinds, the order book of Siemens Gamesa grew substantially. In the offshore segment, the order intake doubled in the past 12 months to 3,343 MW. Of that figure, 1,279 MW were signed in the first quarter. Siemens Gamesa is the clear leader in this segment, with a pipeline of projects totalling 9.6 GW.
Onshore order intake is up by 8.1% to 2.6 GW, with China (18%) and Canada (16%) being the main sources of the growth.
In the service department, the company recorded an extraordinary level of commercial activity, with order intake reaching €1,470m in Q1 FY2020, four times as much as in the first quarter of FY 2019. This growth is linked to the recent takeover of Senvion’s service business in October last year. The service contracts account for 46% of the company’s order book.