https://www.miningweekly.com

Siemens Gamesa buffeted by rising costs as turbine launch problems deepen

20th April 2022

By: Reuters

  

Font size: - +

Siemens Gamesa is trying to raise wind turbine prices to cope with lofty raw materials costs and iron out complex internal procedures that have delayed new products and helped trigger a huge quarterly loss, CE Jochen Eickholt said on Wednesday.

His comments came after the world's largest maker of offshore wind turbines flagged deeper than expected problems launching a new generation of onshore turbines as well as higher costs, causing it to pull its 2022 outlook and put it under review.

Shares in the company fell as much as 5.4% on the news, while parent Siemens Energy, which owns 67% of Siemens Gamesa, dropped as much as 6.9% after saying it also had to review its annual forecast for sales and profits.

Wind turbine makers are struggling to protect their margins as the prices of vital components soar, even though there is strong global demand for renewable energy capacity to stem planet-warming carbon emissions.

"For specific materials ... steel, copper, others, ... the price peak we kind of reached is kind of still in existence," said Eickholt, a former Siemens Energy board member who took the helm of the wind turbine maker in March to get the problems under control.

Eickholt, in a call with analysts after presenting a €304-million second-quarter operating loss, said there "were quite a number of underestimated complexities" delaying the launch of the company's new 5X onshore wind turbine.

"The needed design stability, the needed design maturity, that is what we are on delay with, in conjunction with then ramping up also manufacturing capacities," he said.

The problems with internal processes have led to frustration at Siemens Energy for quite some time, raising pressure on management to intervene and fix the situation, possibly by acquiring the remaining stake or replacing key leadership.

"Two thirds of the difficulties are internal root causes," Eickholt said, adding solving these could not be achieved quickly.

Eickholt said the company was trying to negotiate price increases "in the range of between a high single-digit percentage and perhaps even above".

The company found some support for its stricken finances in an agreement to sell its wind farm development division to British utility SSE, chalking up an expected capital gain of €550-million.

Edited by Reuters

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION