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Siemens Energy, the German clean energy company, reported a full-year net loss of 4.6 billion euros on Wednesday, just hours after agreeing to a government-led rescue plan.
The group said it would restructure its Siemens Gamesa wind turbine business after confirming heavy losses, which it described as an “unexpected, serious setback”. The company issued a profit warning in June.
Siemens Energy said it does not expect its wind business to return to profitability until 2026, which will weigh heavily on the group’s profits even as its other divisions are expected to continue growing strongly.
Overall, the company expects to return to profitability next year. The shares of the DAX company, which was spun off from Siemens in 2020, have fallen by more than 40 percent so far this year. Siemens continues to hold a 25 percent share.
“In a year of unprecedented challenges, Siemens Energy has shown that turnarounds are possible with business units, excluding wind energy, meeting or exceeding their full-year targets,” said CEO Christian Bruch.
“We are seeing progress in addressing the issues at Siemens Gamesa and I am pleased that the data from the installed onshore turbines confirms our findings so far. Our strong balance sheet remains a top priority and Siemens Energy’s critical role in the energy transition will continue to drive our growth and success in the years to come.”
Problems at Siemens Gamesa are “limited,” the company added. The division struggled with technical problems with some of its core products and was hit hard by inflation, which squeezed its margins thanks to fixed selling prices.
The German government confirmed on Tuesday that it was providing 7.5 billion euros in loan guarantees for Siemens Energy as part of a 15 billion euro rescue package and had borrowed 12 billion euros from banks to shore up its order backlog.
Due to difficulties at Siemens Gamesa and broader problems in the renewable energy financing market, the company warned on October 26 that without billions of dollars in additional loans and loan guarantees, it would struggle to fulfill a huge order book of more than 110 billion euros.
The company will suspend its dividend for the duration of government support as well as bonuses for its board of directors.
As part of the rescue package, Siemens Energy will also sell a stake in its Indian joint venture with Siemens at a 15 percent discount, raising €2.1 billion.