CEO Christian Bruch said Monday that the company needs to slow down its rollout of new products after booking 2.2 billion euros in costs due to quality issues at its wind turbine unit.and warned that costly failures at wind turbine subsidiary Siemens Gamesa could drag on for years, sending Siemens Energy shares tumbling.
A Siemens Gamesa blade factory on the banks of the River Humber in Hull, England on October 11, 2021.Shares in the company whipsawed throughout Monday's trade, opening 5% lower and recovering to gain more than 4%, before retreating once again to trade 5% lower by mid-afternoon in Europe. "However, obviously, it has to be set up in a way that you can run a profitable business, and obviously making sure that we slow down this fast rollout of new products is a key element in this."
This included "negative tax effects from valuation allowances on deferred tax assets in connection with the charges at Siemens Gamesa," the company said. "Operationally, all divisions performed well, with the exception of Gamesa. In particular, Gas Services beat on revenue and profit by 5% and 25%, respectively, with a solid margin of 10.9%, 170 [basis points] above consensus," Gael de-Bray, European head of capital goods research at Deutsche Bank, highlighted.
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