The German group reported an annual loss of nearly 5 billion euros, weighed down by its wind subsidiary, the day after the disclosure of a 15 billion euro rescue plan for the company. in trouble. Despite 112 billion euros in orders garnered by Siemens Energy in 2022, its renewable energy branch is not yet profitable.
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The German company, specializing in the manufacture of power plants, particularly thermal power plants, also builds wind turbines. But, like everything the area, this activity suffered from major problems linked to the disruption of the supply chain and the explosion in the costs of raw materials, in particular of the steel used for towers and blades. “ Costs related to quality problems » of the group’s wind turbines, but also the increase in the costs of production materials « have seriously impacted the results of the 2023 financial year and will continue to have an impact on the group’s profitability in the short and medium term “, the company said in a press release.
The group’s public contracts, awarded before the war in Ukraine and therefore before these upheavals, are no longer profitable, Siemens Energy had already warned last August.
To save the national flagship, the federal state has put in place a plan ensuring 15 billion euros in bank guarantees. Siemens Energy will receive this money in the form of loans. To raise more funds, the group will have to sell its stake in a joint venture founded in India. If this strategy works and orders continue, the group should generate a profit of one billion euros next year.
The renewable energy sector faces Chinese competition
The boost from the German government can be explained by the importance of the company in the German industrial fabric – 26,000 employees in the country – and by that of wind power in the German energy transition: the country has just abandoned nuclear power and plans to move away from coal if possible in 2030. More broadly, it confirms a trend towards increasing intervention by the German state in the running of companies deemed strategic.
The group’s wind power branch should now only reach profitability in 2026. The group is otherwise active in the construction of turbines for gas power plants or hydrogen equipment, as well as transformers.
The renewable energy sector in Europe complains of competition often considered unfair from China. “ We must resolve our problems to be able to beat Chinese competitors on equal terms “, commented Christian Bruch, CEO of Siemens Energy.
Read alsoEuropean Commission presents its ‘action plan’ to support the wind industry
(And with AFP)