Mixed fortunes for Siemens in Q1

Siemens’ energy business posted a rising income in its 2013 fiscal first quarter as its Wind Power division showed revenue growth and the company saw lower losses related to German offshore connections.

However, losses from the discontinued solar unit continued to drag down overall company results at the German industrial giant, which said its solar exit plan remains “a complicated matter”.

Wind Power revenue surged 27% in the first quarter from a year earlier as the company continued to work through its order backlog, chief financial officer (CFO) Joe Kaeser told journalists.

That helped the division to a €52m ($69m) profit in the three months ending 31 December, compared to a €26m loss a year earlier.

However, new wind orders plunged by 25% in the first quarter year-on-year, in part due to concerns about the fate of tax incentives in the US at the end of 2012.

The US had been a major contributor to high orders a year earlier, Siemens said.

The company says it is looking at the implications of the last-gasp production tax credit (PTC) renewal but is "confident that we will see renewed interest from our customers in the US".

Offshore wind continued to be a burden to Siemens’ Power Transmission division due to delays in North Sea grid connections. But at €16m, the unit’s first-quarter losses were far more moderate than a year earlier when the deficit amounted to €145m.

“Profitability was held back by €28m in project charges related to these (offshore) projects,” chief executive Peter Löscher said.

Löscher was optimistic, however, that there will be no further delays to remaining projects scheduled for 2014 and 2015.

Siemens’ discontinued solar business remained a drag on results. The company reported a solar loss of €150m in the first quarter, including impairment charges of €115m, mostly related to a major project in Spain.

So far, the German conglomerate hasn’t found a buyer for the solar operation. “This continues to be a complicated matter,” CFO Kaeser said at an analyst call. “I wouldn’t be surprised if there are more losses related to this issue coming along.”

The overall Siemens group reported a 12% decline in first-quarter net income to €1.21bn amid an “uncertain economic environment”.

Löscher said. “For the rest of the year as well, we don’t expect any tailwinds from the global economy to help us reach our ambitious goals.”

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