Wednesday, August 4

Siemens Gamesa lowers its business forecasts for 2021 due to the rise in the price of raw materials and Brazil

Siemens Gamesa has revised down its forecasts for 2021 to place revenues between 10,200-10,500 million euros after provisioning 229 million for onerous projects due to the rise in prices of raw materials and the launch costs of its 5.X platform, especially in Brazil. With all this, the company has also adjusted the ebit margin before for the year 2021 to a range of – 1% to 0%, as it has advanced to the National Securities Market Commission (CNMV).

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After the announcement, Siemens Gamesa shares fell by around 15% in the early stages of the trading session.

The renewable energy group notes that the impact of these factors has been exacerbated by the pandemic, especially in countries like Brazil where the company faces “deficiencies” in the supply chain and “bottlenecks” related to execution.

This has therefore made it necessary to review the preliminary closing of the third quarter of fiscal year 2021 and to adjust its market guidelines for fiscal year 2021. In August of last year, the company advanced that it expected to return to positive margins in 2021 and to invoice between 10,200 and 11,200 million euros.

Siemens Gamesa, which will present the final results on July 30, has advanced the preliminary accounts for the third quarter, which point to sales of 2,700 million, a negative ebit of 150 million, a net debt of 800 million, and a portfolio of total orders of 32.600 million.

In fact, the reevaluation of the profitability of the wind turbine order book as a consequence of the aforementioned factors, has resulted in provisions for an estimated amount of 229 million in this quarter.

The impact is mainly concentrated in the first projects with Siemens Gamesa’s 5.X platform in Brazil with delivery in 2022 and 2023.

Order intake during the quarter amounted to 1,500 million euros, being affected by the volatility of the offshore marine wind market.

It should be remembered that in the first nine months of its fiscal year 2020 (October-June), the group’s sales fell 9.2% to 6,615 million, the ebit showed a negative balance of 264 million and the portfolio added 31,500 million .

The company also indicates that it continues its efforts to achieve sustainable profitability and that ongoing cost and efficiency measures will be intensified, especially for the 5.X platform.

Additionally, it has indicated that it continues to make progress in the program focused on the transformation of the “onshore” business unit and that the performance of the “offshore” and Services business units continues to be solid.

In this regard, he pointed out that the company’s long-term potential and its strategic framework remain unchanged given the role of wind energy in the energy transition and its strong positioning in all market segments.

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