Blazing Ahead: Siemens Energy Hits Record-Breaking Quarter
Record-Breaking Success - Siemens Energy Surges Forward - Siemens Energy experiencing sustained growth, posting record-breaking quarterly results.
Siemens Energy is bouncing back from past crises, steaming towards a successful year! In the latest quarter, the energy technology titan raked in a staggering tax-adjusted profit of 501 million euros - a breathtaking five-fold increase from the previous year. Despite Siemens Gamesa's ongoing troubles, other sectors have been shining so brightly that the company has significantly upped its earnings forecast. Even the looming US tariffs aren't causing too much fuss.
"A bit of a pain, but manageable," CEO Christian Bruch sums up the tariffs' impact. The firm estimates the aftermath in the remaining two quarters to be a high double-digit million-euro sum. Compared to figures mentioned by German automakers, this impact is relatively minor. These minor bumps in the road are more than offset by the recent impressive performance.
Revenue and Order Boom
This boom in orders is reflected in the quarter's revenue and order intake. Revenue leaped by nearly 20% to almost 10 billion euros, while order intake skyrocketed to a whopping 14.4 billion euros, growing by more than half.
Bruch refers to this increase as a "tidal wave" of orders. "The un ceasing demand for electricity across the globe" has created this wave, he states. Bruch recently lifted the forecast - from a result around the break-even point to a potential 1 billion euros in profit. "Our newfound confidence in the continued market opportunities and exceptional execution capabilities are what's driving this positive outlook," he explains.
In the past, troubles with individual projects, particularly at Gamesa, have weighed heavily on the overall numbers. Now, Siemens Energy is optimistic that it's tamed these issues.
Siemens Gamesa's Ongoing Struggles
However, all is not smooth sailing for Gamesa. In the second quarter, the subsidiary once again reported a substantial loss in its segment, but this was more than outshone by robust results in the turbine and maintenance businesses, as well as power grid technology. Despite continued challenges with two major onshore wind turbine types, Gamesa is predicted to reach the break-even point next year. If the performance in other sectors remains at current levels, Siemens Energy could reach new heights in its results.
First, though, the company must meet its current forecast. If it manages this, it will mark the second annual profit since Siemens Energy's spin-off in fall 2020 - a feat achieved last year thanks to gains from the sale of Siemens India shares. This time, it will be down to the company's own efforts.
Transitioning Away from State Guarantees - but No Dividend in Sight
Despite the strong performance, shareholders of Siemens Energy will not reap dividends this fiscal year, Bruch explains. The reason? The state guarantees Siemens Energy received two years ago to secure its full order book. Although the company anticipates shedding these guarantees during the fiscal year, it will only be able to pay a dividend based on profits from the following year, a payout that could reach shareholders as early as 2027.
Still, shareholders may have something to celebrate: on the day news broke, Siemens Energy was one of the day's biggest winners on the stock exchange.
- Siemens Energy
- Gamesa
- Christian Bruch
- Munich
- Siemens AG
- CEO
- Christian Bruch, the CEO of Siemens Energy, believes that the significant increase in the company's orders is a "tidal wave" created by the worldwide unceasing demand for electricity.
- Despite Siemens Gamesa's ongoing struggles, the robust results in Siemens Energy's turbine and maintenance businesses, as well as power grid technology, have more than outshone the subsidiary's recent substantial quarterly loss.
- Siemens Energy, bufferred by the impressive performance of its sectors, anticipates shedding the state guarantees it received two years ago to secure its full order book during the fiscal year, allowing for a potential dividend payout as early as 2027.
