Siemens Gamesa well placed to continue developing wind energy
Published by Bella Weetch,
Editorial Assistant
Energy Global,
Siemens Gamesa completed a challenging third quarter of financial year 2021 (April - June) with a backlog worth €32.6 billion (+3% y/y), €1.1 billion more than a year earlier. This order book evidences the company is well placed to capture the potential of the wind industry, driven by an increase in decarbonisation commitments and the role of renewable energy in economic recovery programmes.
As announced in a regulatory disclosure to the CNMV, Spain's stock market regulator, Siemens Gamesa’s performance in the third quarter reflected the impact on backlog profitability of rising commodity prices and the higher-than-expected ramp-up costs for the 5.X platform. That impact — exacerbated by the pandemic, especially in Brazil — resulted in a provision for onerous contracts related to projects to be executed in FY22 and FY23.
Consequently, the company adjusted its guidance for FY21 with an EBIT margin pre-PPA and before Integration and Restructuring (I&R) costs in the range of -1% to 0%, and group revenue expected to be at the low end of the range announced during the presentation of results for the second quarter (30 April 2021): €10.2 - €10.5 billion.
“We are operating in what is currently a very difficult environment and have taken additional steps to balance our risk profile as we focus on delivering long-term sustainable profitability. Despite current challenges, the company is soundly placed to take advantage of the huge potential of wind energy, which is reflected in our strong order backlog. Our industry has bright prospects ahead, supported by a growing political and public commitment to fighting climate change by moving to a zero carbon emission future,” said Andreas Nauen, Siemens Gamesa’s Chief Executive Officer.
As the company continues to strive for sustained profitability, in the third quarter Siemens Gamesa began to introduce clauses into its onshore contracts to protect against commodity price volatility (mainly in steel towers). In addition to such mechanisms, Siemens Gamesa continues to incorporate cost inflation into contract pricing and to ensure the necessary procurements to execute its backlog in FY22.
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Read the article online at: https://www.energyglobal.com/wind/30072021/siemens-gamesa-well-placed-to-continue-developing-wind-energy/
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