Strong Q1 for Siemens Wind Power
Rising profits at its Wind Power business helped Siemens to good overall first quarter results in its Energy Sector, but a widening loss at the power transmission unit due to ongoing offshore grid-connection issues continued to drag.
Profit at the Wind Power unit increased 20% to €63m ($86m) in the first quarter of the company’s fiscal year ending on Dec. 31, 2013, from a year earlier, lifted by a 15% increase in revenue that included an expansion of the division’s service business.
Orders in Wind Power shot up 94% to €2.26bn in the quarter, pushed higher by a major US onshore wind contract that is the largest in the division ever.
That deal – a 1.05GW order from MidAmerican Energy – was joined by a 582MW offshore contract from Dong Energy for the Godewind 1 and 2 projects off Germany’s North Sea coast.
Orders declined, however, in power transmission and power generation.
The loss at the power transmission unit widened to €84m, from €16m in the year-earlier quarter.
Charges of €67m related mainly to grid connections to offshore wind-farms in Germany, Siemens said, “resulting from revised estimates of required resources and personnel as well as delays associated with the projects’ complex marine environment.”
Problems with high-speed train deliveries as well as with offshore grid connections are likely to cause material charges for years to come, chief executive Joe Kaeser warned during a press conference.
“We could connect one platform, but three of the platforms are still lacking, and many things depend on the weather situation,” Kaeser said.
“Even if we have proven with the first platform that it is technically feasible, we have no influence on the weather situation.”
While one more converter platform for offshore grid connections could be installed this spring, all connections currently in the works should conclude only by 2016, Kaeser cautioned.
Overall profit at Siemens’ Energy Sector jumped 23% to €506m in the first quarter from a year earlier.
On the positive side, Energy Sector orders were no longer burdened with charges related to the defunct solar business, which a year earlier still ate away €157m of the company’s profit.
Others sectors at Siemens had a mixed performance in the first quarter, with healthcare and the Industry sector posting losses, while the Infrastructure and Cities sector was booming. That lifted the industrial giant’s overall net income to €1.79bn from a year earlier.
“We delivered a sound quarter to start our fiscal year. As expected, market conditions were not in our favour,” chief executive Joe Kaeser said.
“We continue to focus on our productivity programme for the year, and on the actions we will take beyond 2014.”