Wind turbine maker Siemens Gamesa misses target amid delays, supply chain woes

(Reuters) – Wind turbine maker Siemens Gamesa (SGREN.MC) said on Thursday it missed its full-year target as revenue declined, mostly due to delays in project execution and supply chain disruptions hampering production of wind turbine generators.

The company said its core earnings margin during the year that ended on Sept. 30 was minus 5.9%, below its own August forecast of minus 5.5%. This includes gains from selling its development division.

Chief Executive Jochen Eickholt described the fiscal year as “challenging” during a conference call with analysts.

Pandemic-related supply chain problems, competition, skyrocketing steel and aluminium prices – exacerbated by the war in Ukraine – have made manufacturing wind turbine components a tough business in recent years, despite strong demand from governments banking on wind energy to wean themselves off fossil fuels.

Siemens Gamesa said it expected 2022/23 to remain a transition year impacted by elevated inflation and new product introduction costs, with still limited benefits from its “Mistral” strategy programme that introduced about 2,900 job cuts.

It also forecast single-digit growth, mostly from offshore projects, in short-term annual installations until 2024.

After 2024, Siemens Gamesa expects long-term demand to boom amid the global push for decarbonization, which it said should see demand for electricity increasing by 30% between 2020 and 2030.

“Going forward, we see a much stronger role for wind,” Eickholt said, despite various risks such as geopolitical uncertainty and supply chain challenges.

The company posted a net loss of 940 million euros ($943.48 million) for the full year, citing higher-than-expected direct material cost inflation and component failures, while its onshore order intake was impacted by protracted contract negotiations and market delays.

Net profit during the July-September period was 286 million euros, compared to a loss of 258 million euros during the same period last year, the group added.

On Tuesday, main shareholder Siemens Energy (ENR1n.DE) formally launched a tender offer for the third of the shares it does not own in Siemens Gamesa.

($1 = 0.9963 euros)

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