Siemens Energy reported remarkable growth in their latest quarter, marking a significant boost in their overall performance. - Siemens Energy posts impressive growth in latest reporting period, demonstrating an upward trajectory.
Siemens Energy, shrugging off the shadows of the past, is heading for a stellar financial year. The energy technology titan just posted its most successful quarter since its independence, raking in an astounding €501 million in profit after taxes. That's almost five times what they made during the same period last year. Although the subsidiary Siemens Gamesa continues to pose challenges, other divisions are pulling their weight so impressively that Energy has significantly bumped up its predicted income. Even US tariffs are causing more of an "eye-roll" than a sweat.
In CEO Christian Bruch's own words, the tariff impact is "annoying but manageable." The company estimates the tariffs will hit them with a high double-digit million euro figure during the remaining two quarters of the fiscal year. Compared to what some German automakers are dealing with, that's relatively minor. These pesky effects are more than offset by the ongoing success.
Order bonanza
This revenue and order intake surge couldn't be clearer in the second quarter numbers. Revenue increased by 20% to a whopping €10 billion, while order intake shot up to an astounding €14.4 billion. In short, that's not just higher, it's more than doubled.
"An order bonanza" is how Bruch describes this development. He attributes it to the "growing demand for power." This newfound confidence prompted Bruch to up the forecast - from a break-even result to a potential €1 billion in profit. "Our soaring market opportunities and excellent project execution" are what inspired him to express such optimism.
Previously, troubles with specific projects (especially at Gamesa) had dragged down the entire company's performance. But Energy is certain they've got those problems under control now.
Gamesa's ups and downs
However, Gamesa's troubles are far from over. In the second quarter, the subsidiary posted a substantial loss in its segment, but that was more than counterbalanced by impressive numbers in the turbine and maintenance business, as well as with power grid technology. Despite ongoing issues with two key onshore wind turbine types, Gamesa is still projected to reach the break-even point next year. If the rest of the divisions carry on performing as well as they are now, Energy could hit a new peak in its results.
Before they can celebrate though, Energy has to hit its current forecast. If they do, they should definitely raise a glass - this would mean not only their first annual profit since Siemens Energy's separation in 2020, but one earned from their own efforts, not from the sale of shares in Siemens India.
On the verge of ending state guarantees - but no dividend
Although their financial success is undeniable, shareholders of Energy won't be receiving a dividend this fiscal year, Bruch explains. The reason? The state guarantees the company received two years ago to secure its order book. While Energy expects to stop relying on these guarantees during the fiscal year, they won't be able to distribute a dividend until the following year's profits are tallied, which could result in a payout in 2027.
Despite this, shareholders did have something to cheer about on Thursday - Siemens Energy was one of the biggest winners on the stock exchange in the morning.
- Siemens Energy
- Gamesa
- Christian Bruch
- Munich
- Siemens AG
- CEO
- Despite the challenges in its subsidiary, Siemens Gamesa, Siemens Energy, under the leadership of CEO Christian Bruch, is expected to post a potential €1 billion in profit this fiscal year due to the soaring market opportunities and excellent project execution, as evident in the record-breaking second quarter.
- The energy giant, Siemens Energy, is in the process of ending state guarantees, but these guarantees have been crucial in securing the company's order book, resulting in the delay of a dividend distribution until the following year's profits are tallied.
- Siemens Energy's recent success, as shown in its impressive financial performance, has positioned it as one of the leading players in the energy sector, with the potential to hit new peaks in its results if its other divisions continue to perform as well as they are now.
