Siemens Energy site in Muelheim an der Ruhr, Germany, August 3, 2022.
Wolfgang Rattay | Reuters
Siemens Energy swung to profit in its first fiscal quarter on the back of a surge in orders and a one-off gain from selling a stake in its Indian affiliate to parent company Siemens.
The German renewables firm reported a 1.58 billion euro ($1.7 billion) net profit, driven by the sale of its 18% stake in India’s Siemens Limited for 2.1 billion euros.
Siemens Energy posted a 23.9% year-on-year increase in orders to 15.4 billion euros, with a book-to-bill ratio of 2.01, pushing its order backlog to a record high of 118 billion euros.
Revenue rose 12.6% on a comparable basis year-on-year to 7.6 billion euros, with a particularly strong performance observed in the company’s grid technologies division.
Profit before special items swung to a positive 208 million euros, up from a loss of 282 million euros for the same quarter a year ago, when the company was beset by around 500 million euros in quality-related charges at embattled wind turbine subsidiary Siemens Gamesa.
Free cash flow was negative 283 million euros, which was “primarily due to Siemens Gamesa, which suffered a high cash outflow due to a loss and a build-up of operating net working capital in a seasonal weak quarter,” the company said.
Siemens Energy suffered a tough 2023, as problems with manufacturing faults at Siemens Gamesa forced the parent company to a 4.6 billion euro loss for the fiscal year. An investigation into quality issues at the wind turbine division is ongoing.
Siemens Energy Chief Financial Officer Maria Ferraro told CNBC on Wednesday that the company was pleased with the momentum shown across its businesses and the strong order intake.
“We continue to work through our Siemens Gamesa quality issues and we saw that this quarter was a stable quarter, so as expected, and step by step we’re going to be looking at all of those quality issues and rectifying those,” Ferraro said.
“We have just shy of 42 billion in backlog in our Siemens Gamesa business — this is also a record order backlog. Half of that approximately is in our offshore business, and as we said we are ramping up across our facilities to really ensure that we facilitate executing those orders.”
Orders in the grid technologies division were up 32.9% to 8.24 billion euros, and Ferraro said that she expected the momentum to continue.
“I think it’s no doubt that each and every country is looking at how do they progress their energy and their green agenda, and certainly our grid technologies business is excellently poised to really benefit from those programs, and you’re seeing that in quarter one and hopefully continuing throughout the rest of our fiscal year,” she added.