Quality Issues in Wind Turbines Result in Losses for Siemens Gamesa
Revenue also fell by 16% YoY due to quality issues with onshore turbines
Spain-based wind turbine maker Siemens Gamesa’s net loss stood at €664 million (~$721 million) during the fourth quarter (Q4) of the financial year (FY) 2023, a year-over-year (YoY) drop from a profit of €374 million (~$406 million).
The loss was primarily attributed to decreased profits from backlog order executions and quality issues in the onshore and service businesses. The heightened product costs and ongoing challenges in ramping offshore activities also contributed to the loss.
The company recorded a revenue of €2.59 billion (~$2.8 billion), a 23% YoY decrease from €3.37 billion (~$3.7 billion). The prior year’s quarter had benefited from the proceeds from selling the Southern Europe wind farm development portfolio.
During the quarter, Siemens took up orders worth €4.22 billion (~$4.6 billion) compared to €4.4 billion (~$4.8 billion) in Q4 FY22. This decline was partially offset by moderate growth in offshore and service businesses, buoyed by a substantial order in Taiwan with a total value of around €2 billion (~$2.2 billion).
Fiscal Year 2023
Siemens Gamesa’s net loss stood at €4.34 billion (~$4.71 billion) during the FY 2023, a YoY increase in losses of 48% compared to the net loss of €617 million (~$700 million).
The company recorded a revenue of €9.09 billion (~$9.87 billion), a 7% YoY decrease from €9.81 billion (~$10.6 billion).
“We are seeing progress in dealing with the issues at Siemens Gamesa, and I am encouraged that the data from the installed onshore turbines confirm our previous findings. Our strong balance sheet remains a top priority, and Siemens Energy’s vital role in the energy transition will continue to drive our growth and success in the years ahead,” said Christian Bruch, President and CEO of Siemens Energy.
The company said technical analysis of the quality issues for the onshore platforms 4. X and 5. X is almost complete, remedial actions have been defined, and mitigation and corrective actions are under development.
Siemens Gamesa has still suspended the commercial activities on the 5. X platform until it defines a timeline and approach to determine how and when to resume sales with a design incorporating the respective corrective measures.
In the offshore sector, Siemens Gamesa is focusing on ramping up its factories and new product generation and executing its order backlog.
Siemens Gamesa’s net loss stood at €2.56 billion (~$2.8 billion) during Q3 FY 2023, a YoY increase in losses of 458% from a loss of €405 million (~$443.4 million).
The company received the approval of a capital reduction for the remaining 2.21% of shares not held by Siemens Energy, leading to the company’s full integration.