Siemens Gamesa has posted a widening operational loss in the first quarter of its fiscal year 2023, with the OEM saying it had been negatively impacted by charges of €472m ($512m) at earnings before interest and taxes (EBIT) linked to “failure rates in specific components”.
“These charges reflect the outcome of the evaluation of the installed fleet, during which the company detected a negative development of failure rates in specific components resulting in expected higher warranty and service maintenance costs than previously estimated,” the company said in a filing to the Spanish stock market regulator.
“The total amount includes mainly a reduction of revenue, and an increase in warranty provision charges, impacting principally the service business.”
According to preliminary figures, the manufacturer had a revenue of about €2bn in the quarter from October to December 2022.
The charges related to product failures dragged down the operating result to an EBIT loss of €760m.
Siemens Gamesa’s order intake during the quarter was about €1.6bn, with the order backlog amounting to about €33.7bn at the end of December.
The company’s onshore average sales price reached €0.95m per MW in the quarter.
Despite the heavy losses, Siemens Gamesa claimed its Mistral recovery programme – initiated by Richard Luijendijk as he took on the role of onshore chief executive last year –was making progress towards the stabilisation of the business and return to profitability.
“In this regard we would like to highlight the progress made on the Siemens Gamesa 5.X platform with manufacturing and installation levels ahead of plan in the first quarter,” the OEM said.
Siemens Gamesa launched Mistral in 2021 to recast the company as a leaner operation in the face of losses and ongoing problems at its troubled onshore wind operation.
The OEM will publish its full quarterly results on 2 February.