Siemens Gamesa doubles profit amid record offshore wind activity

The OEM’s order backlog rises to a record €25.1bn amid a surge in US onshore and Taiwanese offshore orders

Siemens Gamesa managed to increase revenues and near double its profit in the first nine months of its fiscal year 2019 as a record activity in offshore wind compensated for lower pricing in its order backlog.

Revenue rose 12% in the period to €7.28bn ($8.11bn) from the same period a year ago, while net profit surged 97.7% to €88m.

“Commercial activity remained sound during the period, supported by strong growth in all business units, particularly new offshore markets such as Taiwan,” the German-Spanish turbine maker said in a note.

Unlike at most other companies, the fiscal year at Siemens Gamesa ends at the end of September.

The main impact on profitability was persisting lower pricing in the order backlog during the period, emerging market volatility and execution challenges in some onshore projects, the OEM said. That was partly offset by synergies, improvements in productivity and higher year-on-year sales volume.

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The company’s order backlog rose 8% year-on-year to a record €25.1bn, driven by its highest-ever order intake in a single quarter of €4.7bn. In onshore wind, orders were driven by a 62%-surge in the US and a 14%-rise in Chile during the third quarter.

In offshore wind, a strong performance in Taiwan helped push turbine orders 11.7% higher as Siemens Gamesa won a 640MW order from developer Wpd for the Yunlin project, and a 900MW order for Orsted’s Greater Changhua 1&2 projects.

Despite what Siemens Gamesa calls a “complex short-term industry environment” (lower pricing, execution challenges), the company said its long-term prospects remain positive, with average annual wind installations set to roughly double through 2040, according to the International Energy Agency.

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