Siemens Gamesa lost 940 million but with a record order book

Siemens Gamesa has closed its last fiscal year with losses of 940 million euros, which places the red numbers of the last three years at the chilling figure of 2,385 million euros. The company is in the process of reconversion and this Thursday it has released some positive messages that, in the opinion of its directors, allow us to think that the company may have a future in a market that, at least theoretically, is going to accelerate the demand for generation of electricity with renewable technologies. One of them is the company’s order book, which already reaches 35,000 million -representing a four-year activity guarantee- and, most importantly, a 26% increase in the sale prices of wind turbines compared to past year.

The sale of the wind farm promotion division to a British investment fund last September has partially alleviated the company’s income statement, which already lost 1,226 million euros in the first nine months of the fiscal year. The actual restructuring, those responsible for the firm have warned, will not arrive until 2024 -next year they have described it as a transition exercise-, after the start of lightening staff costs. A process with which a 10% cut is intended, which means reducing 2,900 jobs, of which 475 are located in Spain.

Siemens Gamesa has already started another of its restructuring processes with the cutting up and sale of some activities. Thus, after the transfer to the SSE fund of its wind farm promotion division, it is now the turn of 8 factories in Spain. They are the ones that produce the multipliers – the equivalent in wind turbines to the gearbox of a vehicle – and some electrical elements. Siemens Gamesa wants to keep only the industrial activity of assembly, which is why it would maintain in Spain only one factory dedicated to this objective.

cost increase

Last year’s sales reached 9,814 million euros, which represents a reduction of 4% compared to the figures for the previous year. The income statement, moreover, has been particularly impacted by the accelerated cost increase in supplies and raw materials. Siemens Gamesa recognized that most of its contracts, signed several years in advance of the scheduled dates for the delivery of its equipment, did not have price revision clauses. Hence, the increases in production costs have turned the sale of wind turbines into a wheel of generation of losses. To this have been added calculation errors in the costs of some sales and also the technical problems of launching the 5X wind turbine, capable of producing almost 7 megawatts of electricity per hour.

On the other hand, the company has already begun the procedures to lighten the structure of its corporate governance, in what is only a prelude to what will happen in the coming months when the takeover bid launched by Siemens Energy to acquire 100 % of the capital of its subsidiary. It currently controls almost 68%. Thus, the company has eliminated the delegated committee of the board of directors to simplify the bureaucratic structure, leaving it to the board to make all the decisions. The next one will be the IPO.