From Reuters via MSN, June 23:
Siemens Energy warned quality problems at its wind turbine unit would take years to fix, wiping a third off its market value and dealing a heavy blow to one of the biggest suppliers to the world's expanding renewables business.
The group scrapped its 2023 profit outlook late on Thursday after a review of its Siemens Gamesa wind turbine division exposed deeper-than-expected problems affecting up to 15-30% of the more than 132 gigawatt worth of turbines worldwide. Its total wind capacity is equivalent to around 132 nuclear plants.
Dealing with issues could cost more than 1 billion euros ($1.09 billion), it said, having to fix flaws in rotor blades and bearings that could cause damage ranging from small cracks to component failures that would need to be replaced.
"This is a disappointing and severe setback," Siemens Gamesa CEO Jochen Eickholt, a Siemens veteran, told journalists on a call.
"I have said several times that there is actually nothing visible at Siemens Gamesa that I have not seen elsewhere. But I have to tell you that I would not say that again today."
Siemens Energy shares closed down 37.3%, their biggest price plunge since the group was spun off from Siemens and separately listed in 2020.
Traders and analysts said the extent of the company's latest problems was still uncertain. As shareholders urged Siemens Energy to get a grip on the situation, the company said it would only be able to deliver a clearer picture in August.
"Even though it should be clear to everyone, I would like to emphasise again how bitter this is for all of us," Siemens Energy CEO Christian Bruch told journalists in a call.
Finance chief Maria Ferraro earlier told analysts that the majority of the hit would be over the next five years.
RAPID DEVELOPMENTThe latest issue with Siemens-installed turbines has further hurt confidence in an industry that has faced major challenges in recent years, with turbine manufacturers dealing with rising costs for raw materials such as steel and fierce competition....
....MUCH MORE
We haven't had much to say about the wind business, either manufacturers or wind farm operators since their returns dropped below those offered by regulated utilities. If the U.S. offshore wind farms ever get started and then, if they can make any money we'll be back to them
