FILE PHOTO: A trader walks next to Siemens Energy AG logos during Siemens Energy’s initial public offering (IPO) at the Frankfurt Stock Exchange in Frankfurt, Germany, September 28, 2020. REUTERS/Ralph Orlowski/File Photo
July 14, 2021
FRANKFURT (Reuters) -Siemens Energy on Wednesday scrapped its margin target after wind power division Siemens Gamesa was hit by higher-than-expected raw material and product ramp-up costs.
Siemens Energy, which owns 67% of Siemens Gamesa, said it would not reach the low end of its forecast for a margin on adjusted earnings before, interest, tax and amortisation (EBITA) before special items of 3%-5% in the year ending September.
The company, which was spun off from former parent Siemens last year, kept its sales outlook and still expects revenues to grow 3%-8%. However, it warned that third quarter results, scheduled for Aug. 4, were unlikely to meet market expectations.
Earlier, Siemens Gamesa, the world’s largest maker of offshore wind turbines, toned down sales expectations and warned of a possible loss in the current fiscal year, blaming a sharp increase in raw material prices.
In its second profit warning in less than three months, Siemens Gamesa also cited higher than expected ramp-up costs for its 5.X onshore wind turbine platform, especially in Brazil.
Siemens Energy confirmed the outlook for its Gas and Power division, saying it still expected sales to rise by 2%-6% and an adjusted EBITA margin before special items of 3.5%-5.5%.
(Reporting by Christoph Steitz; Editing by Richard Pullin)