Siemens Energy AG sees a return to profit in the coming fiscal year after a government-led deal boosted its prospects for large-scale contracts to offset ongoing losses at its Gamesa wind business.
The manufacturer expects net income of as much as €1 billion ($1.1 billion) in fiscal 2024, even as it forecasts Gamesa won’t break even until 2026, it said on Wednesday.
The technical review of problems with Gamesa’s onshore platforms is nearly finished, and the unit is working on a timeline to resume sales with a corrected design.
Siemens Energy announced the revised outlook together with details of the €15 billion deal with the German government, a consortium of banks and biggest shareholder Siemens AG to shore up its finances with loan guarantees and cash.
The guarantees are key to secure financing for large-scale orders in its profitable gas-turbine and power-grid businesses.
While the manufacturer has a record order backlog of €112 billion, the problems at Gamesa led to a €4.59 billion loss for the fiscal year through September, the company said.
The net gain forecast for next year will be driven by disposals, bringing in as much as €3 billion, the company said.
Siemens Energy’s share price has slumped more than 40% this year as problems with the faulty wind turbines mounted.
Major components of its onshore wind turbine 5.X can twist over time, making the devices prone to breaking down.
Findings from the technical review, while not yet complete, so far support the company’s previous repair-cost estimate of at least €1.6 billion.
For the fiscal fourth quarter through September, Siemens Energy posted a 2.5% decrease in revenue to €8.5 billion, falling short of analyst estimates of a €8.68 billion result. Orders fell by 10.6% compared to last year’s quarter.
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