Siemens Energy, which supplies equipment and services to the power sector, expects to hit the lower end of its profit margin target this year, the company said on Monday, adding its wind turbine division remained under pressure.
“Our adjusted outlook reflects the strong demand, as well as the continuous challenging market environment in the wind industry,” Chief Executive Christian Bruch said.
The group said it now expects its profit margin before special items to come in at the lower end of its 1 per cent-3 per cent target range, pointing to a 374 million euro (USD 412 mn) second-quarter loss at its Siemens Gamesa division.
Shares in the company, which makes and maintains gas and wind turbines as well as converter stations, were indicated to open 1.7 per cent lower in pre-market trade.
Siemens Energy cited supply chain issues, the ramp-up of offshore activities as well as loss-making legacy contracts at the Spanish-based wind turbine maker as the reasons for the ongoing problems.
At the same time, Siemens Energy’s order backlog hit a record at 102 billion euros and the group also raised its sales outlook due to faster-than-expected growth in its markets, now forecasting revenues to increase by up to 12 per cent in 2023.
“All in all, (there is) some for the bulls and some for the bears,” a Frankfurt-based trader said, adding that the weak performance at Siemens Gamesa should initially weigh on shares.
Siemens Energy still swung to a profit before special items of 41 million euros in the second quarter, helped by its other divisions – including gas services and grid technologies – compared with a 49 million euro loss in the same period last year.
