Siemens Energy Sails Ahead Despite Troubles with Gamesa
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Siemens Energy posts impressive quarterly performance, exhibiting growth. - Siemens Energy exhibits impressive growth trajectory in recent quarter.
Siemens Energy, brushing off the dust of the previous years' crises, is steaming towards a promising year. In the most recent quarter, which CEO Christian Bruch deems the most successful since the company's independence, Siemens Energy brought home a whopping €501 million in profit after taxes. That's almost five times the value from the same period last year!
While the stumbling block, Siemens Gamesa, continues to weigh the numbers down, other sectors have shone so brightly that Energy has significantly upped its forecast. Even the U.S. tariffs cause only minor ripples.
Irked but Manageable Tariffs
These pesky tariffs? According to the Energy CEO, they're "annoying, but manageable." The expected damage in the remaining two quarters of the fiscal year is projected at a high double-digit million euro figure. Compared to the hefty burdens German automakers are facing, this is quite the relief.
Order Surge
This positive outlook was also apparent in the second quarter's revenue and order intake. Revenue soared by about a sixth to nearly €10 billion, and order intake was a robust €14.4 billion, not only significantly higher but also grew by more than half. Sounding more like an excited punter than a CEO, Bruch refers to this as an "order boom."
"The increasing demand for electricity" propelled the triumph, and Bruch recently raised the forecast - from a result around the break-even point to up to €1 billion in profit. "The improved outlook reflects our confidence in the sustained market opportunities as well as our excellent project execution."
Gamesa Still Floundering
The turbulence at Gamesa, however, is far from over. In the second quarter, the subsidiary once again caused a substantial loss in its segment, but it was more than offset by strong numbers in the turbines and maintenance sector, as well as power grid technology. Although Gamesa's struggles with two major types of onshore wind turbines persist, the company aims to reach the break-even point next year. If the progress elsewhere continues at the same pace, Energy may soon reach new heights in its results.
First, though, the company needs to meet its current forecast. If it does, this wouldn't be the first annual profit since Siemens' spin-off in the fall of 2020 - that happened last year - but this time it would be the result of the company's own efforts, not just from gains from the sale of shares in Siemens India.
Marching Beyond Guarantees - No Dividend
Despite the impressive performance, shareholders will have to wait for their dividend in the current fiscal year, Bruch explains. The reason is the state guarantees the company received to safeguard its full order book. Although the company is on track to phase these guarantees out during the fiscal year, it will only be able to pay a dividend for the profits earned in the following year, likely in 2027.
In light of this, shareholders can still cheer in the stock market. Siemens Energy was one of the top performers in the morning trading session on Thursday.
- Siemens Energy
- Gamesa
- Christian Bruch
- Munich
- Siemens AG
- CEO
- Siemens Energy's CEO, Christian Bruch, highlights the success of the company's recent quarter, with a profit after taxes of €501 million, almost five times the value from the same period the previous year.
- Despite the imposing tariffs causing minor ripples, Siemens Energy's strong performance has significantly upped their forecast.
- In the turbines and maintenance sector, as well as power grid technology, Siemens Energy has offset the substantial loss caused by the ongoing struggles at their subsidiary, Gamesa, and aims to reach the break-even point by next year.
