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Siemens Gamesa posts a net loss of $974 million due to higher warranty costs

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By Christoph Steitz and Inti Landauro

FRANKFURT/MADRID (RockedBuzz via Reuters) – Beleaguered wind turbine maker Siemens Gamesa, soon delisted and sold to parent Siemens Energy, said on Thursday its first-quarter net loss more than doubled on higher warranty provisions due to defective components.

Net loss in the October-December period, Siemens Gamesa’s fiscal first quarter, increased to 884 million euros ($974 million) from 403 million in the same period last year, the company said.

The company last month signaled increased failure rates of unspecified components of its onshore and offshore wind turbines, triggering higher warranty provisions that have also plagued Danish rival Vestas.

“The negative development of our services business underscores that we have a lot of work ahead of us to stabilize our business and return to profitability,” said Jochen Eickholt, chief executive officer of Siemens Gamesa, who joined Siemens Energy last year. year.

Eickholt was brought on board to resolve operational issues at Siemens Gamesa, including issues with the onshore 5.X turbine that prompted several profit warnings for the Spanish-listed group and its German parent.

However, Siemens Gamesa confirmed that the outlook for the wind industry remained good, pointing to the US Inflation Reduction Act and the continent’s RePowerEU program to move away from fossil fuels.

“But more government action is needed to close the gap between ambitious goals and actual installations,” said the company, whose shareholders last week approved plans to delist this month.

($1 = 0.9078 euros)

(Reporting by Inti Landauro and Christoph Steitz; Editing by David Latona, Rachel More and Miranda Murray)

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