Siemens Gamesa lowered its guidance for the financial year 2020 after its first quarter results were impacted by unforeseen one-off charges amounting to €150m ($165m) relating to a portfolio of five onshore wind projects in Northern Europe, mainly in Norway.
Adverse road conditions and an early arrival of winter weather have delayed project execution substantially and detrimentally impacted the installation window, the turbine manufacturer said, and drove preliminary results during the first quarter of fiscal 2020 below market expectations.
Investors were jittery following the news, with Siemens Gamesa shares plunging 11.25% to €14.00 in early morning trading at the Frankfurt Stock exchange.
Revenue according to preliminary figures during the first quarter that ended on 31 December 2019 fell 12% to €2bn from the year-earlier quarter.
That pushed net income down to a loss of €174m, compared to a profit of €18m in the first quarter of fiscal year 2019.
As a consequence, the OEM lowered the forecast for its Earnings before interest and taxes (Ebit) margin for the full 2020 fiscal year to a range between 4.5% and 6%, down from an Ebit margin of 5.5-7% that was previously expected.
The German-Spanish turbine maker said it is putting in place actions to turnaround the execution track record in the project pipeline in Northern Europe, and does not expect to see further impact from such pipeline execution in coming quarters.
Siemens Gamesa said its order intake during the first quarter of fiscal 2020 was up 82% at €4.63bn, bringing its order backlog as of 31 December to €28.1bn.
The company will present full first quarter results on 4 February.
