Siemens Energy, which supplies equipment and services to the power sector, posted forecast-beating second-quarter sales and lifted its revenue outlook, as strong demand pushed the firm’s order book past the 100 billion euro ($110 billion) mark.
Sales in the January-March quarter were up 24% at 8 billion euros, beating the 7.4 billion Refinitiv estimate and spurring the group to now expect revenues to grow 10%-12% this year, up from 3%-7% previously.
“Strong orders confirm our very good positioning in the markets for energy transition technologies, such as power generation and transmission,” Chief Executive Christian Bruch said.
At 102 billion euros, the group’s order backlog hit a fresh high at the end of March, boosted by its gas services and grid technologies units as well as its struggling wind turbine division Siemens Gamesa.
“We have the largest order book we’ve ever had,” Bruch said, pointing to the positive environment for energy technology in the wake of favourable legislation in the United States and Europe, including the Inflation Reduction Act.
This led to a 56% order increase in the second quarter, driven by Europe and the United States, Siemens Energy said.
Shares in the company, which makes and maintains gas and wind turbines as well as converter stations, rose 2.3% to the top of Germany’s blue chip index.
Ongoing problems at its wind turbine division still had a negative impact on profits, with Siemens Energy now expecting its profit margin before special items to come in at the lower end of its 1%-3% targeted range.
Siemens Energy cited supply chain issues, the ramp-up of offshore activities and loss-making legacy contracts at the Spanish-based wind turbine maker as reasons for the ongoing problems.
This caused a quarterly loss of 374 million euro at the division.
Overall, Siemens Energy still swung to a second-quarter profit before special items of 41 million euros, helped by its other divisions – including gas services and grid technologies – compared with a 49 million euro loss in the same period last year.
($1 = 0.9084 euros)