Siemens Energy multiplied its losses by 10 times in its fiscal year 2023, which ended in September, to 4.532 billion euros, compared to the 467 million it lost in the previous financial year, due to problems with its subsidiary Gamesa.
German energy company Siemens Energy said on Wednesday that Siemens will buy an 18% stake in a joint venture in India for 2.1 billion euros as part of a solution to its problems, a move that comes on top of the 7.5 billion euros in guarantees pledged by the German government yesterday.
This will increase Siemens’ stake in the Indian company (Siemens Ltd. India) from 51% to 69%, while Siemens Energy’s will be reduced from 24% to 6%.
Gamesa posted an operating loss of 4.58 billion euros in 2023, up from a negative 937 million euros a year earlier, and its parent company expects to lose around 2 billion euros in 2024.
Two more years of losses for Gamesa, says Siemens Energy
Siemens Energy also expects Gamesa’s wind power business to be in the red for at least two more years and Gamesa to return to profitability by 2026.
Siemens Energy had a turnover of 31.119 billion euros in 2023, up 7.3 per cent year-on-year, and posted an operating loss of 3.257 billion euros compared with the 574 million it lost a year earlier.
Siemens Energy CEO Christian Bruch said in presenting the figures that in “an unprecedentedly challenging year”, all businesses except wind power achieved targets.
Bruck also stressed that he sees “progress in addressing Siemens Gamesa’s problems”.
Siemens Energy: 5,000 jobs up in the air in Spain
Gamesa’s situation worsened after technical problems were detected in the rotor – the part that allows the wind turbine blades to rotate – of its main onshore wind turbine models in production, including the turbines that are in operation, of which between 15 and 30 % could fail in the future.
This incident has forced wind turbine sales to come to a standstill and the company is only accepting certain orders for offshore installations, which has led to a reduction in its production activity.
This slowdown also affects Siemens Gamesa’s 3,000 suppliers, most of which are located in Navarre, the Basque Country and the Madrid region. In total, 5,000 direct or indirect jobs are at stake due to the company’s difficult situation.